Usefulness Assessment of Technical Analysis of World Gold Prices (Approach to the Directional Indicators or Oscillators)

Subject Areas : Journal of Investment Knowledge

Reza Tehrani ¹ , Yasser Kargari ² , Mahtab Davarzadeh ³

1 - Associate Prof. Financial Management of Tehran university.iran.
2 - MSc. Financial Management. Tehran University. Iran.
3 - MSc. Economic Sciences. Esfahan University. Iran.

Received: 2013-08-06 Accepted : 2014-01-12 Published : 2014-01-12

Keywords: gold price, Technical Analysis, Relative Strength Index,

Abstract :

This article investigates the usefulness of applying the technical analysis to the world gold market by using daily world gold price data per ounce in the US Dollar during last 37 years and the Relative Strength Index which is a directional indicator of the technical analysis. The results of this study indicate that the use of buy and sell signals derived from this method using the Relative Strength Index Junction 50 on the world gold market over the last 37 years has been significantly beneficial. The average yield of gold ownership in the gold market, when the relative strength index technical analyses of predictive signals, signs are sold, the value is negative. The average return on equity (or maintenance) of gold in the gold market, when relative strength index technical analysis of the predictive signals, signs are purchasing, the value is positive. This article is also a useful model to provide technical analysis of gold prices