Black and yellow gold

Two markets provide clues to the level of economic activity and the behaviour of exchange rates. These markets serve as a warning bell. They can be traded, or used as a background to set the strategy for trading-associated markets, including indexes and individual stocks that are bellwethers to their sub-sectors.

World economies still run on oil. The US economy may run on domestic shale oil but China remains dependent on imported oil. West Texas oil sets the benchmark. Currency movements are more accurately reflected in the behaviour of gold than in the indecisive deliberations of the US Federal Reserve. The rise of gold exchange traded funds (ETFs) has injected a new level of sensitivity into the yellow metal's price.

Our analysis uses technical and chart analysis of price activity. This method has delivered an 88 per cent success rate in achieving price targets in more than 141 weekly market notes over the past three years.