Thursday, March 5, 2015

2015.03.05 Gold Cycle Model Chart

2015.03.05 Gold Cycle Model Chart

The gold cycle model suggests another inflection point in the price curve occurring at the end of April, which if the model continues to perform well, suggests strong cyclical pressure for a price rise in that time frame. The Z-score is still below 2, so from that aspect, the model is still performing within its limitations.


A Jones said...

Thanks for posting. However, I think this model needs some major revision, as it's simply not reflecting the price action in the *real* world.

The model has been predicting an uplift for the past six months or more, yet the gains are not there. I think it's going to trend lower at least for the next 12 months or more.



Anonymous said...

Main markets are still in the bull market!

I think gold still has ~2 years before it takes off. You model is incorrect on timing.

Eric said...

Z score has to be near 3 after today's wipeout.

PayDay said...

Both Gold and VIX charts lagging with z scores over 3-4. Only silver seems on track.

Anonymous said...

Hello Paolo - looks like the turn in the VIX is taking hold thus far. It will be interesting to see if "fear" takes hold to elevate the VIX to much higher levels. I'm currently positioned to take advantage of a downturn, though I don't "believe" it as such.

I would actually be astonished if this the case and not merely just a corrective phase before new SPX ATHs. (Perhaps everyone has been psychologically conditions to expect continual new ATHs - including myself.)

The latest iteration of your VIX and XOI model runs will be most insightful indeed - the sharing of your work is greatly appreciated,

Mr. Anon

Paolo said...

Thanks Mr. Anon. I'm glad you are finding the models useful, warts and all!

Some readers had some questions about the gold cycle model. It is still below a nominal Z-score of 3. The model is converging rapidly so there are no issues in that arena. Of course, convergence is not the same as predictive power... I'll once again point out that for all cyclical models, the turn dates are better estimated than the price levels at the turn dates.

Anonymous said...

Interesting reaction by gold to FOMC - I expected a more dramatic move one way or another. I've now entered a (really) small long position with stops just below weekly lows, on the basis of weekly support (lower Bollinger Band). It's not my primary market by far, so this is mostly a side position for me.

Mr. Anon

Anonymous said...

Just for interest and to put recent price action into context ...

The London Gold Fix, which will be discontinued after Thursday, is determined by just four participants. The nearly 100-year-old, medium has also been the target of decades of manipulation allegations.

But the LBMA has said the electronic auction process for setting the gold price is designed to be transparent and to allow as many participants as possible.

“The new method for fixing the gold price daily will be more reflective of that day’s collective price of gold on the world market,” said Jim Wyckoff, senior analyst at, adding that he believes the previous London fix “was not greatly askew on that determination.”

It's hard to believe that the reported information has NO bearing on past, current or future price discovery.

Mr. Anon

"Markets must be experienced forwards, but only understood backwards."