SPDR Gold Trust ETF (GLD) — This commodity exchange-traded fund (ETF) is a rare pure play on gold since it holds physical gold bullion and seeks to track the price of the metal, minus fees and expenses.
Gold is generally considered to be a countercyclical investment, meaning it is often purchased as a way to hedge global economic crises. That may make it attractive to some investors at the current juncture.
Despite its volatility and sensitivity to fluctuations in currency and interest rates, Morningstar gives the fund its highest rating of five stars, in part due to its relatively low management fee of 0.4%.
GLD fell from a 52- week high of $133.69 in March to a low of $109.67 in late November. Following that low, we saw an increase in buyers and MACD turned bullish. In late November, I commented that I would remain bearish until GLD closed above an important inflection point at $116.07.
That inflection point was penetrated on Dec. 1 with a high of $117.36 and a close of $116.58. It was also penetrated on Dec. 9, when the ETF hit a high of $118.99. This closed several gaps made in late October and early November, which was a bullish development.
GLD is again a “buy” with support at the bottom of a bull channel, positive high volume, a supportive MACD and shares trading above their 50-day moving average. Purchase GLD at $116 for an intermediate-term trade to $124, which would result in a 7% return.
