A Simple Gold Trading System (2)

What was the result of this system?

Backtests of the system since 1971 show that it has earned investors an income of 16.8% a year when gold was bought (its price was above its 10-month moving average) and income of 2.9% when it was sold (the price was below the 10-month moving average).
For comparison, following the simple buy-and-go strategy for gold for the period under review has yielded an average annual return for investors of 8%.
In short, investors were definitely supposed to be in gold when they had a "purchases" signal.
Summarized, the system results look like this:
Between 2001 and 2012, the system has given frequent "buy" signals.
Between 2012 and 2015 dominated "sell" signals.
In 2016, the system gave signals for purchases in the first half of the year and a signal for sale from mid-October.

A Simple Gold Trading System (1)

The simple things are the ones you have to stick to when trading in the financial markets - this is advice given to investors by not one and two great investors, including the genius Warren Buffett.
In this line of thought, I will now introduce you a simple gold trading strategy that you can use as a second opinion when investing in the noble metal.
In fact, at this moment of uncertainty, more and more investors are looking at gold. Relations between the US and China are strained, and the official start of the "trade war" was also given in the beginning of the month.

What is the strategy?

The strategy is represented by experts from the Daily Wealth and includes long positions in gold if its price is over its 10-month moving average and shortening if the price of gold is below it. It just sounds simple, right? Yes... So we have met the requirement for simplicity.

Oil with dramatic loss yesterday

The oil price was exceptionally strong yesterday. The Brent lost $3.49 of its value, or 4.6%, to finish the first day of the week at $71.48 a barrel with delivery in September. This was the lowest closing date since April last year.
US crude oil fell by 2.95 dollars, or about 4.2% to 68.06 dollars a barrel. Its lowest closing level since 21 June.
The Trump administration, in addition to conducting active political talks with Russia and Saudi Arabia to boost production, plans to resort to US strategic reserves to stem the fall in oil prices.
The average selling price of oil rose 16% since the beginning of the year, resulting in serious dissatisfaction with Trump's policy.
The sanctions imposed by the US on Iran are largely among the main reasons for the rise in oil prices in international markets.
According to the International Energy Agency, US state producers are expected to raise their daily production by 143,000 barrels in August, compared to a year earlier.

Asian indices with the first weekly increase for five weeks

Asian indexes on Friday scored their first weekly boost in five weeks after China refrained from declaring details about their response to US tariff hikes. Shares in Japan, Hong Kong and South Korea rose on the last day of the week, while those in China and Australia declined.
Beijing's officials seem to mitigate against President Trump's tariffs as a result of the slowdown in the economy, the fall in prices of shares on stock markets and the weakness of the currency.
China's exports for June exceeded analysts' average expectations, while imports slowed far more than expected, export data said.
Investors and analysts are turning their eyes on the upcoming quarterly reports, which can largely determine the future direction of stock markets around the world.

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US indices ended yesterday on green territory

Yesterday, the US indices ended in positive territory, with the biggest gain of 0.5% being the Dow Jones blue chip index. The broad S&P 500 added 0.4% to its value. With least gains ended the technological Nasdaq, adding only 3 points to its value. Otherwise, the index following the performance of the smaller companies - Russell 2000, ended in a negative territory.
Oil lost $0.5 of its value, and noble metals returned almost everything earned within the day. Earlier this morning gold is traded at levels of $1,250 per ounce and silver is below the psychological limit of $16.00 per ounce. Now is the question whether we will see a test of the bottom at $15.60 an ounce and will it remain in force?

The pound is stabilizing

The British currency rebounded on the second day of the week, following fears about the withdrawal of two ministers yesterday. The British pound rose to 1.3270 against the dollar, after registering yesterday the lowest value of 1.3180 against the US currency.
After two ministers of May's cabinet resigned - first Brexit negotiator David Davis and then Foreign Minister Boris Johnson, there were given signals for a softer Brexit. And that's good news, according to market observers.
Several hours after Davis's resignation, the British Prime Minister appointed Dominique Raab, who was in charge of the London-Brussels talks on the UK's exit from the EU.
Conservative lawmakers announced that May is likely to be sure of her leadership despite two resignations, and that directly helped the British pound recover.