Gold Trader Update

Gold Trader has been quiet for months, until recently, so I wanted to share this update with clients and those following from the sidelines, as an important inflection point is taking place in the precious metals market now - one that we are well positioned to take advantage of.

First, a recap. As you know, I designed Gold Trader to take advantage of the daily cycles that appear with regularity in the gold market. Generally, the first and second daily cycles of each medium-term Investor Cycle (IC) tend to show the strongest performance, while the third and fourth (and sometimes fifth and sixth) daily cycles tend to show the weakest performance. The data from over a decade’s worth of daily cycles is included in the table below.

Gold DCs.jpg

Gold Trader is designed to buy the start of DC1 and DC2 and sell the end of DC3 and DC4. History has shown this to be a winning strategy over 70% of the time. So what has happened in recent months? Let’s take a look at the recent Investor Cycle. You can see from the table below that DC1 and DC2 were uncharacteristically tame, only rallying 3-4% from low to high. DC3 and DC4 uncharacteristically rallied more but then the decline was less than normal. Hence, no real opportunity for Gold Trader to fire.

GT History.jpg

That changed recently. A new IC kicked off on 3rd May and DC1 has already added over 6% and counting. Gold broke out above $1,350 this morning. Once $1,400 clears, it’s blue skies ahead. Gold Trader is long at $1,285 and I am going to be very patient with this trade. I may just hold through the DCL for DC1 to the top of DC2. Patience is about to be rewarded for gold investors. Stay tuned.