ChartArt

Reminder: Gold investment idea for the year 2017

AMEX:GLD   SPDR GOLD TRUST GOLD SHARES NPV
Gold could be a great very long-term investment entry to hedge against a crash of the "S&P 500" in the year 2017 and beyond, after the election of Donald Trump.

Here is my original "Gold" chart I made 5 months ago. The price of my lower entry arrow has been reached, plus the time window has been reached, which is why I publish this reminder. This chart is posted as neutral, because there is not yet enough price movement to the upside to fully confirm this entry signal, plus the time window has just started. So there could be one more dip to the downside before the actual larger rally starts later in 2017.


Ideas supporting Gold as safe haven investment in 2017 and beyond:

The new US president sleeps only 3-4 hours per night according to his butler and according to his 2004 book "Trump: Think Like a Billionaire". This lack of sleep might cause chronic sleep deprivation, with symptoms including sudden mood swings and emotional imbalance. That could lead to more stock market volatility in the future, which would benefit safe haven assets like "Gold".

Trump has appointed more military generals in his cabinet than any president since World War II. This might lead to a foreign policy that is less inspired by civilian ideas and more heavily dependent on U.S. military.

In addition the political risks around the world are increasing, as measured by the “Economic Policy Uncertainty” ( EPU ) index, which scans the entire spectrum of news sources each day for words indicating worry, doubt, and contingency about policy direction. This index has negative correlation with equity prices and a high positive correlation with stock market volatility . In most economies around the world, the EPU index is currently surging. A GDP-weighted average of the EPU indexes from 17 countries has recently hit unprecedented heights—higher than 9/11, Gulf War II, the GFC , or the Euro-Crisis of 2011.


Sources:

Will Policy Uncertainty Hammer Markets? The “Economic Policy Uncertainty” ( EPU ) index
http://www.forbes.com/sites/neilhowe/201...

Trump's butler for almost 30 years
http://www.bbc.com/news/world-us-canada-...

Trump's potential chronic sleep deprivation
http://www.huffingtonpost.com/kelly-bulk...

Trump's admiration of generals
http://www.politico.com/story/2016/12/tr...
your idea is brilliant, how do you estimate the time window and how do you know the Gold is good investment in 2017?
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ChartArt Yuyu327
@Yuyu327, Thank you.

Answer: I started the time window at January 2017, because seasonally each end of December to early January the gold price typically starts to rise more often than in other months, based on historic statistics - and as we know now it happened again this year. Usually the best time to sell is February based also on seasonal statistics, which is why I made this time window to buy so long. Because I expect gold prices to fall again until at least Summer 2017, before a very large rally could start once the best seasonal cycle for US stock markets ends (around summer each year). I also found many stock market risks for the years 2017, 2018, 2019 for the US stock market based on long-term market cycles which would support gold prices in the future, for example this cycle:

Benner-Fibonacci Cycle
https://www.google.com/search?q=benner+cycle

Which can lead you to versions created by traders and investors in the last years which are adapted to calculate near-future stock market cycle peaks.
Reply
ChartArt ChartArt
@Yuyu327, You can research seasonal cycles yourself using the following website. Below the monthly bars you can expand the historic time window from the default setting of 5 years to up to 20 years and then you can also move the 20 year time window back and forth around the last decades to see how seasonal cycles have changed over the last years and which seasonal monthly highs and lows have stayed around and occurred the most often going back in time:

Gold
https://stockcharts.com/freecharts/seasonality.php?symbol=%24GOLD

Silver
https://stockcharts.com/freecharts/seasonality.php?symbol=%24SILVER

Dow Jones Industrial Average
https://stockcharts.com/freecharts/seasonality.php?symbol=%24INDU

S&P 500
https://stockcharts.com/freecharts/seasonality.php?symbol=%24SPX
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