Gold Technical Charts For July 2010

A trader needs just to study the weekly chart of SPDR Gold Trust ETF (GLD) to know what is occurring in gold.

GLD has been in an uptrend ever since October of 2008. October of 2008 was when the U.S. government did a $750 billion bailout of its most important banks. It is also the month that Britain did a $68 billion bailout and Germany announced a blanket blank deposit promise for all deposits. So with governments around the world printing money to bailout their monetary institutions it makes since that currencies were diluted and gold became a safe retreat.

This over 19 month bull run in SPDR Gold Trust ETF (GLD) has 10 points of contact against the trend line I trace in the video. If you regularly watch my technical analysis videos you will recognize that I'm extremely serious regarding having at least three points of contact when drawing trend lines. The extra points of contact on the trend line, and the longer the trend has held, the more important that trend line gets.

The important level to keep in mind is 113. SPDR Gold Trust ETF (GLD) is presently in a short term down swing on the weekly stock chart. I believe that GLD is headed back downward to test this 113 level. SPDR Gold Trust ETF (GLD) is in a strong uptrend and so at this point in time, I think that SPDR Gold Trust ETF (GLD) will spring up off the 113 support level.

There are several ways you can play this 113 level. I suggest that if you are waiting for a pullback in gold to buy the precious metal or mining stocks, then you will wish to enter a long when SPDR Gold Trust ETF (GLD) is around 113. Conversely, if the 113 mark is broke, you should book your gains and move to the sideline because the 20 month uptrend line will be broke.

You might be pondering how can you know to buy off 113 versus selling if this level is taken out? When 113 is hit, you want a confirmation week of the bounce off 113. As soon as you get that confirmation week, you are able to enter your long. If the confirmation week is a doji, then push verification out an additional week.

The important thing to remember is that in a market sell off, GLD will be pulled down as well. The difference is that GLD will not be taken down as low as the rest of the stock market.

In the video below, I perform technical analysis on SPDR Gold Trust ETF (GLD) using only a weekly chart and I explain to you the all important 113 mark you need to watch.

gold forecast

by: Sam Stoker

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