It’s nice to see gold catching some bids lately. One theme to emerge in the first half of 2013 seems to have been “kick the crap out of gold bulls” as it continued the downtrend started in 2011. Don’t get me wrong. Gold is still in a downtrend, but the recent price action has created an interesting setup.
Looking For A Flip To Support
Since the SPDR Gold Trust ETF (GLD)’s last attempt to rally in late-2012, the 50-day moving average (green line) has acted as a solid form of resistance. With yesterday’s move, bulls were able to get a close above the moving average and are likely now praying that it flips from resistance to support.
In April and May of this year, GLD appeared to have been trying to put in some support at $130, but eventually lost out as bears forced it to gap down taking the commodity ETF $15 lower. While we're back at that support level, we're testing it from its underbelly. Pre-market, it seemed we' d stay below $130, though I’ll be watching to see if traders can collectively fight back above and hold that level.
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