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Monday, July 8, 2013

GLD and GDX 7/8

There was no follow through in the gold complex this week from the potential reversal the previous week.  However, that low is still intact.  Here is the daily GLD chart.

GLD may be doing a short term retest of the recent low.  It had a big gap down today and probed lower, but ended up near the open.  This still looks like it has potential to make a trading low here.  Lets see what it does next week.

The GDX daily chart has a similar look.

They are both in extreme over sold conditions.  Will they pick themselves up off the floor and bounce?  I think they might, but we do need to see the bulls show up.

Longer term gold might have to deal with the dollar.  Check out the monthly chart of the dollar index.

The dollar index has been rising since 2011 and is still looking pretty perky.  It broke above its 18 SMA, went back and tested it from above and is rallying again.  That is something it was unable to do the other two times it got above the 18 since 2008.  I would have to say it is in a bull market.  Is gold going to rally long term along with the dollar?  I don't know.  Currently gold is in a bear market and the dollar is in a bull.  Therefore, I am looking at a bounce in gold as a trading op only.  I will have to wait and see how things develop before I can make any long term outlook.


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