I have further refined the gold indicator; not yet published, but the manuscript is almost complete.
The new model produced significantly better returns than the original model did. An investment in gold according to the refined model’s signals produced a 14.91% compounded annual return from September 28, 1970 (the initial buy signal date) to November 23, 2012 (the last sell signal date), assuming no interest on cash when the model was not in gold. With interest at the Federal Funds rate from a money market account when the model was not in gold, the compounded annual return was 17.58%, equivalent to $100 growing to $92,785 over this period. The model’s returns are considerably better than a continuous investment in gold which would have produced only a 9.63% average annual return over this period, equivalent to $100 growing to only $4,837.
| gold continuous investment | $100 | $4,837 | 9/28/1970 | 11/23/2012 | 9.63% |
| no interest when in cash | $100 | $35,209 | 9/28/1970 | 11/23/2012 | 14.91% |
| with interest when in cash | $100 | $92,785 | 9/28/1970 | 11/23/2012 | 17.58% |
| percent of time in gold | 69.10% |
This model is currently not invested in gold and waiting for a signal.