Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Timing Your Next Trade In Precious Metals

ByMichele Schneider
Published 07/14/2021, 12:19 AM
Updated 07/09/2023, 06:31 AM

GLD/SLV-Daily Chart

With the release of the Consumer Price Index (CPI) report yesterday showing an inflation increase of 5.4% compared to the expected 3.8%, we should pay close attention to investments that keep inflation in mind.

Though we have recently talked about food commodities and agricultural tech as potential hedges against inflation, precious metals such as gold (SPDR® Gold Shares (NYSE:GLD) and silver (iShares Silver Trust (NYSE:SLV)) remain the go-to investment.

However, prices of gold and silver have yet to take off. Therefore, we can look for price action to confirm if precious metals are ready to push higher.

From a technical standpoint, gold (GLD) recently had a golden cross. This means the 50-Day moving average has crossed over the 200-DMA.

While this is a bullish sign, next we can watch for the price to clear the 200-DMA for 2 consecutive days around $171.40.

When watching for phase changes over or under major moving averages it helps to wait for a second day to confirm price action can hold. Although there is no perfect trading rule, waiting the second day greatly increases the chances the 3rd day will hold.

On the other hand, silver (SLV) has been trending sideways for roughly a month and needs to clear resistance at $24.70 created from its recent high on 7/06.

Silver’s 50 day moving average sits overhead at $25.07. Whether you initiate a position over the recent consolidation or wait a bit longer for a confirmed phase change, the point is that the metals have yet to reflect real inflation.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

And their time could be coming real soon.

ETF Summary

S&P 500 (SPY) 427 support area.

Russell 2000 (IWM) Needs to clear highs at 234.50 area. Minor support 217.85

Dow (DIA) 351.09 high to clear.

NASDAQ (NASDAQ:QQQ) Doji Day. (Day where open price and closing price are close together.) Shows indecision.

KRE (Regional Banks) If cannot get over 63.63 today, next support area at 61.24.

SMH (Semiconductors) 245 main support area. 262.50 resistance.

IYT (Transportation) 251.78 support.

IBB (Biotechnology) 159 support area. 165.79 resistance.

XRT (Retail) 99.24 main resistance.

Junk Bonds (JNK) 109.57 support needs to hold.

XLU (Utilities) Holding over the 10-DMA with main support at 63.

SLV (Silver) Trading sideways. Resistance at 24.69.

VBK (Small Cap Growth ETF) 293 resistance. 280. Support.

TLT (iShares 20+ Year Treasuries) Next support area the 50-DMA at 141.

USD (Dollar) 91.40 support area. 93.44 resistance.

DBA (Agriculture) 17.54 support. Siting in resistance around 18.02

GLD (Gold Trust) Watching to fill gap at 171.03.

UNG (Natural Gas) 13.32 minor resistance area.

TAN (Solar Energy) Held over the 200-DMA at 88.06.

USO (US Oil Fund) 48.22 recent support.

XME (S&P Metals and Mining) 44.42 resistance level.

Latest comments

"NYSE:GLD" Michele Schneider, isn't it a bit hypocritical to talk about inflation concerns and then turn around jumping into a mass printed paper gold fund? GLD claims to be fully backed by physical gold but yet it refuses to give retail investors the right to redeem for any of these ‘claimed’ gold bullion. This fact alone would mean GLD shares are nothing more than paper. GLD’s prospectus is chalk full of loopholes that allows the fund to get away without the full physical gold backing. One good example of this is the clause that states GLD has no right to audit subcustodial gold holdings. I have never heard of a good reason for the existence of this audit loophole. There was a well documented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear in any relevant bar lists. This "GLD" bar was actually owned by ETF Securities.
Even on the subject of GLD's insurance, they are not straightforward about it. Their representatives will not confirm nor deny the existence of GLD's insurance. I recommend anyone curious about this to confirm via calling GLD's publicly listed number for general inquiries at 866 320 4053 and ask about this clause from the GLD prospectus: "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." Exactly how much of the fund is insured? They will not give you a straight answer and might even throw in some bizarre excuse which I've experienced. Why hide this information from investors? The people behind GLD certainly do not seem like the most honest types.
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.