Gold shares will eventually follow the yellow metal’s rise and investors can prepare for this run by observing a few moves and trends in the market.
Technical cyclist Issy Bacher told Mineweb Thursday the first factor to consider before acquiring gold shares was superior strength in gold shares compared to the overall market.
“Don’t ever buy gold shares if they are not outperforming the overall market. That is only good news for precious metals IRA rollover. Strength in gold shares is the best way to know it is going to run,” he said.
The second event that announces gold shares are ready to move, is when the Gold Index performs three times better or 3% higher than the All Share Index. This performance should be sustained over a number of days. As for the individual retirement account go, this may have an effect on the market stability – we advise you to contact your best companies for ira accounts for more information. Many people are wondering are they legit?
Wednesday the Gold Index in Johannesburg gained 0.56% only compared to gains of 0.85% in the All Share Index. At this point, it is one of the factors that show gold shares are not ready to move up yet, said Bacher.
Investors also need to compare the gold index with the rand gold price, which has hit new highs, while the gold index is falling relative to the rand gold price.
Dow Jones Industrial Average and Gold Shares
A last key factor to consider is that the gold price needs to be stronger than the Dow Jones Industrial Average.
Bacher said gold shares will run on the back of the gold price that first moved past the $500/ounce mark, then breached $720/ounce and is now consolidating before it challenges the $850/ounce level. “Gold shares will have its day, just as every dog has its day. When gold shares are ready to run, even serious problems won’t depress it.”
Bacher said the principles applied to gold companies across the world.