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Gold & Silver Form Golden Crosses - Technical Indicators That Chartists Love

The term 'golden cross' is used to describe the moment an investment's short-term moving average (typically the 50-day moving average) crosses over and breaks above its long-term moving average (typically the 200-day moving average).

As long-term indicators tend to carry more weight, the golden cross indicates a bull market on the horizon, particularly if reinforced by higher-than-normal trading volumes.

Additionally, the long-term moving average tends to become the new 'support level' in the ensuing rising market. 

All of which lovely stuff makes technicians ('chartists') see the golden cross as a good signal that the market has turned strongly in favour of the investment - particularly when both the long-term and short-term moving avereages are both rising at the point of the crossover. Bullish indeed!

Putting the above graphically for GOLD we get:

 

Gold_X

 

and for SILVER: 

 

Silver_X

 

Sunday October 7, 2012 by Robin Newbould