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Tuesday, May 15, 2012

GLD update

Still no sign of a bounce in GLD.  It is getting really, really oversold in the short term now.  It broke some support levels, only one left that I can see nearby.  Here is the monthly chart.

The December low marked by the lower horizontal line looks like the last important support level.  Here is the daily chart.

That is some kind of stretched price.  One complicating factor that is different from my last look at GLD is the dollar index.  In the last 2 days it has really taken off.  Take a look at the weekly chart. 

The dollar index has cleared several months of sideways price action and seems to be starting another leg up.  The GLD/dollar index inverse correlation has not been all that perfect of late so it is hard to say if this is going to hurt GLD or not longer term.  In 2008, when the stock market was crashing, GLD took a dump because a lot of people were selling gold to meet margin calls.  That may be at work here causing this extreme move down, I don't know.  If that is the case, then GLD may have longer term problems and be headed lower if stocks continue down.  It looks like GLD will be in for a technical bounce that could be significant soon, but I have to say the longer term picture looks cloudier then it did just a few days ago.


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