Gold Vs Crude Oil
Some analysts say that Gold is looking expensive in here, but the rally may be just getting underway.
In the last month traders have pushed Gold futures to near a 9-month high. And if the history of Gold’s relationship with Crude Oil is a guide, that surge may last longer than any geopolitical tension.
The precious Yellow metal has rallied 11%+ in Y 2017 to trade at 1,296.70, compared to a 10% fall in WTI Crude Oil at 47.56 Monday in New York.
That divergence in price may still be going, meaning Gold should continue to outperform WTI Crude Oil before the 34-month cycle ends, according to a study of past trading patterns for the 2 assets.
Gold has rallied during the recent market setback and is now testing its Key resistance at 1,300. That is the mark that turned back rallies in April and June of this year, so Gold clearly breaks above 1,300 it will very Bullish the precious Yellow metal.
Driven by technical factors and geopolitical issues managed money is moving into Gold. Net-Bullish bets on the metal are the highest since October, according to Commodity Futures Trading Commission (CFTC) COT data.
Also, investors added $321-M to the SPDR Gold Shares ETF (exchange-traded fund) (NYSEArca:GLD) so far this month, while pulling $540-M from the SPDR Energy Select Sector fund, according to the data.
|HeffX-LTN Analysis for GLD:||Overall||Short||Intermediate||Long|
|Bullish (0.25)||Bullish (0.38)||Bullish (0.27)||Neutral (0.11)|
|HeffX-LTN Analysis for USO:||Overall||Short||Intermediate||Long|
|Neutral (-0.01)||Neutral (-0.11)||Neutral (-0.04)||Neutral (0.11)|
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