Since my last update on the gold charts a couple weeks ago, the SPDR Gold Shares (GLD) is trading at roughly the same levels it was then … and really, nothing exciting has transpired in the bigger picture. From a macro point of view, the layout for gold and GLD remains similar too, with slow but positive growth in the U.S. and Europe, still-accommodating central banks, rising bond yields and low inflation.
Long story short: It’s not a great environment for gold or GLD to rip higher (which probably explains why I haven’t heard much from the gold bull camp), but a better trading range with defined levels might be giving us something of a swing-trading opportunity on GLD.
First, the gentle reminder before the first gold chart: Gold has a broken chart that a) will take much time to repair and b) is (for most folks) best left alone until the broader market structure changes. And by the broader market structure, I’m referring to central bank monetary policies and where we are in the economic cycle.
For the moment, I can’t express strongly enough that the massive gold bull market is over, so don’t hope on a big rebound anytime soon. (And yes, plenty of folks still think gold/GLD will suddenly start rocketing higher again.)
On the closer-up time frames, those inclined to trade this currently rather boring gold ETF should note that the down-trending channel since August remains intact. Even closer up, however, the past eight trading sessions have given us a still tighter trading range in GLD, which nicely defines the risk from a swing-trading perspective.
In other words, for GLD, a break above $121 is bullish for a trade, while a break below $119 is bearish again.
And please don’t forget to keep a close eye on the movements in the U.S. dollar at all times, it really does affect the price of gold.
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Learn more about the strategies Serge Berger uses to create profits in the market every day. Download his trading plan in the Essence of Swing Trading e-book by clicking here. As of this writing, he did not hold a position in any of the aforementioned securities.