With the U.S. stock market starting the year with a historic slide and the rest of the world in or near a recession, conventional wisdom dictates that gold should be a good investment now.
Some market prognosticators are urging investments in gold and oil, since they are beaten down. But hold on—not so fast. Let’s look at a way to take the guessing out of when to underweight or overweight gold.
Check Out This Metric
A simple 13-week over 34-week moving average has done a good job at identifying both up-trending “cyclical bull” market periods and down-trending “cyclical bear” periods. We want to underweight or step away from gold during the down-trending periods, and add exposure in up-trending periods.
By Steve Blumenthal. See the chart and the full story in ETF.com: Follow This Gold Metric To Buy/Sell.