Trading Gold? Consider These Three Factors Now

February 24th, 2016 by VantagePoint Software

gold

We aren’t living in your grandfather’s trading environment anymore. Traders need to keep their finger on a lot of pulses these days. Maybe you’re a Gold bug looking to focus only on the technical and fundamental factors affecting this precious metal. Or maybe you are also trading crude oil. But wait, there’s the Indian growth data to consider and what did Mario Draghi just say? Throw a bunch of economic reports and indicators as well as inter-related global markets together and everything from soup to nuts seems to matter to the markets now. The truth is, knowing where this precious metal is going can be difficult.

Regardless of where you fit on this spectrum, there are three macroeconomic factors you need to remember when trading Gold and one technical solution that can help you quantify this seemingly unquantifiable data.

How to make money when interest rates are negative

You can’t. It may seem counterintuitive, but if you put your money in the bank, you will have to PAY them to hold your cash. The Bank of Japan followed other central banks in going negative on rates in late January, a sign of the continuing global trouble from plummeting low oil prices, stalling international trade and slowing growth in China. Japan’s Prime Minister, Shinzo Abe, is seeking new ways to break the country’s cycle of decline. The BOJ joins a growing group of global central banks with negative interest rates including the European Central Bank, Sweden, Denmark and Switzerland.

So this all should be good for Gold, right? Global central bankers remain concerned about sluggish growth and below-target inflation. This loose monetary policy around the world should be a bullish sign for Gold as this is a hard asset that should gain in value.

Gold isn’t the only metal that matters

There are many things that affect the price of the metal. Comex copper futures tumbled to their lowest level in late January since April 2009. While they have rallied back recently, China’s insatiable appetite for copper has tumbled as their aggressive building and construction phase slows. Weak copper demand signals global growth is likely to remain weak, which will keep global central banks with their hands on the easing button, which should be a long term positive for Gold.

Stock market correlation affects Gold

When things were getting super dicey for US equities in January, Gold was rallying. The standard view is that these two markets are inversely linked: when the stocks go up, the yellow metal dives, and vice-versa. Why do we often see a negative correlation between the stocks and the shiny metal? When traders go into defensive mode, they may prefer Gold as opposed to riskier stocks. The saying goes that this metal is a safe-haven, so naturally it’s correlated inversely (or, at least, uncorrelated) to stocks during a serious financial turmoil.

The stock market has rebounded but volatility seems to be here for the long haul. These economic factors make it tough to quantify the true impact on the price of Gold. It’s difficult to decide which input should be weighted the most.

By combining Intermarket Analysis with a Neural Network process, VantagePoint quantifies these relationships. The end result is the output of an accurate forecast of where Gold is heading.

To see this technology in action watch the video below. You’ll see recent market forecasts for Gold as well as stocks that are impacted and influenced by the price of Gold.

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Forecast Gold using these Market Correlations

April 2nd, 2015 by VantagePoint Software

How to Forecast Gold

Whether you’re trading commodities, ETFs or stocks, understanding the related markets that have an effect on the price of Gold will improve your trading results. But how can you accurately forecast gold with a high degree of accuracy? It might mean looking not only at gold, but at up to 25 markets that directly and indirectly affect gold – pushing the price up or pulling the price down.

market forecast gold

We take a look at Gold, $GLD and $ABX to uncover how understanding correlations between markets from a global standpoint can allow you to make smarter trades and consistent profits.

The patented technology in VantagePoint uses intermarket analysis predictive indicators to provide traders with information and confirmation days ahead of market trends.

You may also like: Gold Trading – How to Invest Wisely

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Gold Trading – How to Invest Wisely

March 16th, 2015 by VantagePoint Software

Last week we showed you a video that demonstrated how accurately VantagePoint’s market forecasts predicted trend changes in Gold. If you missed that video Go Here to watch it now.

Gold bars

The price of gold is ubiquitous in today’s markets, affecting many different sectors. Traditionally, investors may buy gold to protect their wealth against losses in other markets on the belief that the precious metal will hold its value better than stocks or cash. This hasn’t always held true.

If you’re a gold trader you know it’s ever present role in many markets and economies has made gold a standard in market trend reporting from the media and financial press. Unlike physical commodities whose prices tend to revolve around supply and demand, gold can almost be considered its own financial market in the sense that it responds to emotion such as fear.

What affects the price of gold?

Many gold traders see this metal as a safety blanket, especially in times of crisis. War, natural disaster or a stock market crash can all cause a buying frenzy in gold as traders view this commodity as more valuable than paper.

Gold also has an inverse relationship with the US dollar so as the value of the US dollar declines, we should expect to see a rise in the price of gold.

Trading Gold Using Intermarket Analysis.

Gold has rebounded in early 2015 starting the year off strong. Watch this video to see how VantagePoint accurately predicted trend moves for gold.

However, the uncertainty of the Federal Reserve may mute gold’s rise. The U.S. central bank is widely expected to raise interest rates in the second half of this year, a policy shift that is expected to push gold prices lower. Gold doesn’t pay interest or dividends and finds it difficult to compete with Treasury bonds and other interest-bearing assets when rates are rising.

The US dollar will also come into play. When the greenback eases, dollar-denominated gold becomes less expensive to investors who use other currencies.

There should be a number of trading opportunities in gold futures and gold ETFs but these markets will be extreme; volatile.

This requires state of the art market forecasting tools.

GLD

VantagePoint Software helps traders understand the impact and influences that related markets have on one another. By understanding these complex relationships, our customers have a bird’s eye view of market behavior days ahead of the trends, which increases their confidence in each position and allows them to become more profitable. VantagePoint is by far the most sophisticated intermarket analysis in the industry. It uses a neural network process to identify which markets have the most influence on a target market, then produces a set of intermarket data to generate predictive indicators for short-term price trend forecasts for the new market realities.

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