Friday, July 17, 2015

2015.07.15 Gold Cycle Model Chart

2015.07.17 Gold Cycle Model Chart

















The gold cycle model stubbornly suggests higher gold prices into the Fall, 2015. At the end of 2008, there was a similar period of time where the z-score was just over 4 and a reversal occurred. You can see this in the long term chart area. The previous iteration is shown below and here on the blog



2015.06.05 Gold Cycle Model Chart

5 comments:

Anonymous said...

Thank you!

Anonymous said...

Why continue to post this chart? It has been incorrect in calling for a rise in prices for over 8-9 months now. This has not happened. So why continue to use it?

Anonymous said...

Actually, going back 3 years, your Gold forecast was very good:
http://econocasts.blogspot.ch/2012/05/20120501-long-term-djia-gold-silver.html

Thank you.

Paolo said...

A common criticism of the cycle models is that the turn dates seem to act like a moving target. Structurally, these cycle models have an error associated with both the turn points as well as the magnitude of the turn points. As the models are run with new data, the model parameters can adapt based on the magnitude of the error parameters. Given that the only information the models are given is the time/price structure, the models answer only one question: "Based on historical cycles, what is the most likely trajectory?" The key here is the "Based on historical cycles..." There are other factors impinging on the price curve that are outside the scope of the model. So once again, all models are wrong, some are useful.

Anonymous said...

Hi Paolo,

Gold is looking great for a long-term reversal, far sooner than I had expected as I had (perhaps mistakenly) tied a low in crude oil to metals generally. I'm expecting a final wash-out low to sweep out all the weak longs that jumped on the recent spike low, which should also provide the Z-score spike for a sustained reversal.

I'm sure many mainstream pundits will be perplexed as to why gold would rise in the rise of rising interest rates, contrary to popular belief in their negative correlation. I'm thinking that a multi-month (or year) rally in gold will be missed by many as a stealth bull market.

EconoCasts is truly a hidden gem of the blogosphere,

Mr. Anon