First Buying Signal For Gold Since 2009

An important buying signal has popped up for gold. Before you start filling your cabinets with the yellow precious metal you have to understand that this is a long term buying signal. It might take a while for the market to realize what is going on, but this is a signal we only get once every few years.

The MACD is a technical indicator that measures momentum. The momentum indicates whether a certain asset is overbought or oversold at any given time. On the chart below you can see the monthly gold price since 2005. The red arrows on the MACD indicate a selling signal, the green arrows a buying signal.

Buying Signal Gold

 

On the bottom you can see the blue line crossing the red line to the upside. This is a buying signal and, as you can see, these buying signals do not come around frequently. The last time was in 2009 when the gold price started from under $1,000 until a buying signal followed around $1,800.

The MACD indicator does not allow one to buy at the bottom and sell at the top, but it does give you a very clear trend evolution. It is only 1 technical indicator, but it is just another piece of evidence that gold is truly bottoming out.

Those who wait until the coast is completely clear will watch most of the potential returns go up in smoke. The biggest part of the gain always comes in the transition from very bad to less bad.