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Thursday, June 20, 2013

GLD and GDX 6/20

Interesting day in the precious medal complex after the FED meeting.  Here is the daily GLD chart.

GLD has been forming a descending triangle.  This is a commonly continuation pattern in a down trend.  GLD ended the day right near the lower line.  Is it going to break or bounce?  I can't really see anything that makes me think this pattern is a bottom.  It could bounce from here, but I would not get bullish on GLD longer term until we break the upper trend line.

Lets take a look at the GDX daily chart.

GDX is testing it recent low.  Will it hold or break down?  GDX had some big green volume bars like it was trying to bottom.  This looks like a better attempt at a bottom then GLD, but is it enough.

Both these charts are at key price levels.  Should they reverse here they would have triple bottoms.  However, I don't see any clear sign that is the higher odds play at the moment.  Gold broke down before the global government bond sell off picked up steam.  Another break down in gold could fan the deflation scare flames.  That could increase volatility across all markets.  Time to pay attention to see what happens.


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