Gold and moving averages

Adam Hamilton’s analyses have been… less than perfectly successful in the last year, but I can’t really dog him since mine haven’t been any better. We’ve both been wrong-wrong-wrong on the stock markets, and right-right-right on metals. Anyhow, he’s got a very nice analysis of how the price action of the dollar-gold relationship has been revolving around the 200-day moving averages over the last few years.

To sum it up, the dollar’s been firming at .90 of its 200 DMA, while gold’s been peaking at around 1.13. However, if you look at the Relative Dollar and Relative Gold chart you can see that in Elliott Wave terminology, gold appears to be approaching a short-term third of a third top if you count from the low point of spring 2003. If you add into the mix the fact that Rick Ackerman is still looking for $450 on this run, I wouldn’t be surprised if we saw a slight correction, one last pop up past the 1.174 previous high, and then the next three-month correction before we start all over again.

I’ll probably dabble a bit with some tactical moves, although with metals I much prefer Richard Russell’s strategy of sit and ride the bull. Strategy has worked much better than tactics for me anyway.