Gold Forecasting with Quantitative Trading

If you have been following my analysis for any length of time then you already know I forecast gold and the stock market using my own method of quantitative trading. If you are not familiar with what quantitative trading is here is my definition.

Quantitative Trading Explained

Trading strategies that are based on a set mathematical numbers and rules like moving averages, oscillators, Fibonacci or any chart calculation that makes decisions either a yes or no (on or off) decision, and that is calculated either manually by you, or automated by a computer is a considered quantitative trading.

Gold Forecast

Last month I posted my exclusive Gold Forecast on Gold-Eagle.com. The report showed how a major currency was on the verge of breaking down and how commodities would start a new bull market. If you have not yet read is report then click the link above.

Updated - Four Stages of the Gold Market

Below is my updated Stan Weinstein stage analysis of gold. If my analysis is correct then Stan’s model is forecasting gold to be dramatically higher in the next 6-24 months.

As you can see, gold remains in a very large price range as sellers continue to hate the underperforming metal which drives the price down and waves of new gold buyers step in and accumulate gold when they think it is a bargain. Until the price of gold breaks above the yellow shaded area I remain neutral/bullish on gold.

Quantitative Trading Gold

I have always been focused on technical analysis because it provides us with the tools to create quantitative trading strategies using indicators and rules for precise trade entry, exits, and price targets.

The chart below of the gold ETF GLD shows how I use moving averages, Fibonacci extensions, and volume and trend lines. I have been able to forecast the next two price targets for gold where it will run into strong resistance next if this is an actual bottom.

My Gold Forecast with Quantitative Trading Conclusion

In short, my quantitative trading gold forecast should be looked at from the big picture perspective.

Getting involved in any gold stock, commodity or investment which is stuck in a trading range carries more risk. This is because you can get shaken out of a positions several times before the new bull market actually starts. The lowest risk position is to wait for the breakout of the basing pattern only then gold market traders can get heavily involved to the long side.

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Chris Vermeulen