SPDR Gold Shares (NYSE: GLD) — This exchange-traded fund (ETF) seeks to replicate the price of gold bullion net of expenses.
GLD had a terrific run from $80 a year ago to the recent new breakout high at over $153. But profit-taking and a stronger U.S. dollar resulted in a pullback to its 50-day moving average. At just under that line, GLD formed the base of a trading rectangle and reversed sharply from it last week, and closed above its 50-day moving average yesterday. This reversal triggered a buy signal from the slow stochastic.
It is likely that this latest round of buying will lead to a breakout through the resistance line of the rectangle and a new high between $155 and $160.
Since commodity ETFs may be subject to greater volatility than traditional ETFs, they may not be suitable for all investors. Traders should enter stop-loss orders to protect against large losses.
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