On July 2nd I scribed here (http://investorplace.com/2013/07/gold-might-finally-be-building-a-bottom/) that gold might finally be in a longer-term bottom building process. While the SPDR Gold Shares (GLD) exchange-traded fund now trades more than six percent higher since July 2nd, I also discussed that this bottom-building process will take time and marginal lower lows are still certainly a possibility.
Interestingly, last week’s avalanche of economic data, central bank interest rate announcements and corporate earnings barely moved gold, which often times reacts quite sensitively to such reports.
For some perspective on where gold stands through a multi-year lens see the below chart. The real steepening in the slope of the SPDR Gold Shares (GLD) began in late 2008, which I thus use as the beginning of the trend. In late June price reached the important 61.80% Fibonacci support level of the entire up-swing from late 2008 up to the September 2011 highs. That is subsequently where gold bounced from in recent weeks, and the low which both bulls and bears have circled as the reference level. In this longer-term bottoming process I fully expect the SPDR Gold Shares (GLD) to at least once re-test this area around $115, or push below, albeit not in a major fashion.
On the daily chart of SPDR Gold Shares (GLD), note that the rally off the late June lows has brought this exchange traded fund into the May down-trend line, which here also coincides win the 50 day simple moving average. Even closer up, the past ten or so trading days came in tight trading, which smells of consolidation which could ultimately resolve with a break higher and out of this near-term bull flag formation and past the resistance line and the 50 day moving average. A break above the $129 area could result in a first move toward $135. A failure in time to move past $129 on the upside however will again increase the odds of move lower for a re-test (or below) the late June lows.
