Can gold only be analyzed by technical analysis?

G

garfangle

Gold and its ETF offshoots like GLD are popular with both retail investors and hedge funds like Paulson & Co. However, since gold doesn't throw off any income it cannot be analyzed like a company nor can it be evaluated like an industrial metal like copper because its use as jewelery is only a small fraction of its demand.

It seems like the only way to evaluate whether gold is worth buying or selling is by using technical analysis (aka charting). Is there another way to evaluate the future price of gold?
 
You could try astrology. It would probably work about as well as technical analysis. Legendary trader W.D. Gann was big on astronomy:

William Delbert Gann (6 June, 1878 – 14 June, 1955 - also known as W. D. Gann), was a finance trader who developed the technical analysis tools known as Gann angles, Square of 9, Hexagon, Circle of 360 (these are Master charts) and more importantly, he foretold wars, disasters, elections, market collapses and prosperity, tops and bottoms months (years) in advance. Gann market forecasting methods are based on geometry, astronomy and astrology, and ancient mathematics.
 
The late economist Roy Jastram summarized his research into the historical value of gold in his book "The Golden Constant." Time and again, an ounce of gold has bought roughly the same number of loaves of bread. So all you need to do is forecast the price of bread.
 
Quote from garfangle:



It seems like the only way to evaluate whether gold is worth buying or selling is by using technical analysis (aka charting). Is there another way to evaluate the future price of gold?
More...

Buy gold just as it is about to go up and sell it just as it is about to drop.

If you cannot find a method for doing this, then forget gold and move on to trade something that you can produce a method for.

The method type is unimportant, what is important are the trading ratios you produce and the consistency with which you produce them.
 
Quote from Arthur Deco:

"... all you need to do is forecast the price of bread.
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LOL!

Gold responds to worries... getting worse or better... inflation, currency debasement.. If one had a fundamental view on such things gold could be played off of it. (Should still use common sense breaks of support as stop, however... gold's a killer when you get on the wrong side of it.... oil too.)

Play gold by TA only? Sure. Once you decide to be a "technical trader", you eliminate many variables and uncertainties... not enough to assure success, but every little bit helps.
 
Quote from garfangle:
Is there another way to evaluate the future price of gold?
More...
imo no

in particular the precious metals and crude oil work well in terms of the fibonacci
ratio number series
they are 'universals', as you say aren't a company that a spreadsheet can be used
to evaluate their future value

just as a comparison
cut diamond 1960 $2,700 Nov 2010 $30,000
http://www.ajediam.com/investing_diamonds_investment.html
uncut prices have had a Large fluctuation in price
http://runescape.wikia.com/wiki/File:GEMH_Uncut_diamond.png
 
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