Gold has always been, and always will be, a controversial asset in investment circles. Its proponents can’t agree on why it deserves a place in portfolios or how much gold should be allocated in various risk-based portfolio models.
But gold can be used as insurance against macroeconomic tail risks such as inflation, a sharp fall in the market or increasing geopolitical tensions spilling over into different markets.
In the chart above, Andrews’ pitchfork uses three parallel trend lines to show areas of past support and future resistance for gold prices. The three parallel lines arise from a significant high and low. Looking at the historical price of gold, it is easy to see the potential for higher prices in line with past price increases. Most investors with a moderate risk tolerance will benefit from a small allocation in the years to come.
Remember that no single asset offers perfect protection against all possible negative consequences. Building a portfolio with intelligent, systematic trading and risk management governance is essential. In times of cross-currents and turbulence, a well-executed risk management strategy is crucial to safeguarding and enhancing portfolio value, such as: B. Adding gold as an additional asset.
At MarketGauge, we have several different quantitative trading portfolio strategies that use signals generated by our proprietary trading indicators to make the most informed trading decisions possible. We use our Real Motion Trading Indicator (see chart above), which shows bullish momentum and forecasts a sustained rally in gold, to guide our trading decisions. Our Triple Play Leadership Indicator also shows market dominance.
The SPDR Gold Shares ETF (GLD) is up 0.45% year-to-date and 4.30% over the last month. His recent performance has been encouraging but far from exceptional.
As an asset, gold is far from perfect. It can be fickle and unpredictable, turning in different directions at different times. However, its recent performance suggests that a strong rebound may be imminent. For this reason, investors should consider a multi-layered approach to trading and risk management and add gold to their portfolios as part of a diversified strategy. This allows you to minimize the potential downsides of owning gold and still position yourself to reap all the benefits if the metal’s price rises.
And while gold may be a controversial asset, it has a place in almost every portfolio as insurance against macroeconomic risk. Global monetary policy is tightening and even Japan plans to raise interest rates next year, affecting bond and currency markets around the world. Many factors go into whether gold is a good investment at any given time, but it’s important to have a well-rounded portfolio that can weather any storm.
With the right risk management trading strategy, you can maximize your chances of success regardless of market conditions.
If you would like to learn more about how Real Motion can help you trade with an advantage, contact Rob Quinn, our Chief Strategy Consultant, who can provide more information Mish’s premium trading service with a free one-on-one session.
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In this appearance on Business First AMMish talks about why she chooses Nintendo (NTDOY).
Misch sits down Gav Blaxberg for a WOLF podcast what she learned as a trader and teacher.
https://www.youtube.com/watch?v=CAeGDCEU104
In this appearance on Business First AMMish explains that with the right risk management, even the worst trade shouldn’t be too bad.
In this appearance on Real Vision, Mish joins Maggie Lake to share her take on the key macro drivers in the new year, where she’s targeting tradable opportunities and why investors need to turn their heads. Recorded December 7, 2022.
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Read Mish’s latest article for CMC Marketswith the title “Two closely watched ETFs could fall further“.
Misch addresses the current confusion in the market this appearance on Business First AM.
Mish discusses trading the Vaneck Vietname ETF ($VNM). this previous appearance on Business First AM.
- S&P 500 (SPY): 375 support and 390 resistance.
- Russell 2000 (IWM): 170 central support and 176 resistance.
- Dow (DIA): 324 first level of support and 334 first level of resistance. The only index above its 50-WMA.
- Nasdaq (QQQ): 265 central support and 276 resistance.
- Regional Banks (KRE): The central support is at 53 and the resistance is at 59.
- Semiconductor (SMH): Support is 204 and 213 resistance.
- Transport (IYT): 211 is central support and 222 is now resistance.
- Biotechnology (IBB): 130 is the central support and 139 is the overhead resistance.
- Retail (XRT): Closed just below 60. 57 central support and 63 is now resistance.
Misch Schneider
MarketGauge.com
Director of Trade Research and Education
Wade Dawson
MarketGauge.com
portfolio manager
Misch Schneider serves as director of trading education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and training to thousands of individuals, major financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial professionals to follow on Twitter. In 2018, Mish was the winner of Top Stock Pick of the year for RealVision.
