Randomly Noted: Gold Sending Bullish Signals

Gold recently set a 7 1/2 year high and that alone would have one thinking that perhaps now is the time to take some profits - or put off buying the yellow metal for now.

But some technical indicators are suggesting that now is a good time to buy. As part of the Regime Change section of Excalibur Pro, we look at various momentum indicators. One of them, the MACD, just saw the MACD line cross above the signal line for gold - typically an indication that now might be a good time to buy. In addition, the Relative Strength Index (RSI) for gold recently dropped and moved away from a value of 70 - the level considered overbought.

We also follow volatility and our one-month rolling volatility for gold has dropped from 2.77 on April 10 to 1.20 on May 18. That's significant because higher volatility often is associated with bearish sentiment in an instrument.

The price of gold sits significantly higher than it's 200-day moving average (although that gap narrowed slightly recently).

The contrary indicator at this moment is the Markov process - which has been issuing fairly strong bear signals for the past couple of months, in large part because of that higher volatility mentioned above.