While we remain bullish on Gold as a longer-term investment, there are a few technical developments in early September that have our attention from a shorter-term trading perspective.
Take a look at GLD right now…
SPDR Gold Trust (GLD) – Weekly Chart
After a nice technical breakout the week of 3/4/24, the GLD price continued higher and made an all time high of $234.01 the week of 8/19/24.
However, the following week 8/26, price DID NOT make higher highs ($233.61) and closed lower than the previous week’s close.
In the first trading week of September 9/3, price opened lower ($230.38) than the previous 8/26 week’s close ($231.29), and so far has not been able to reach the prior two week highs.
GLD remains in a tight trading range.
In addition to price potentially stalling, we see a Price + Momentum divergence developing, where price has been making higher highs while momentum underneath has been trailing off, with the momentum/relative strength indicator recently moving down from the “overbought” territory.
We can dig a little bit deeper and do a relative comparison of the more “risk-on” areas of the gold industry (like Junior Gold Miners and Gold Miners) using these as a proxy for gold risk appetite:
- We can see below that the more risk-on Junior Gold Miners have been losing relative strength vs Gold Miners & GLD and diverging from GLD making higher highs.
- And more recently, the Gold & Silver Sector Index (XAU) has started making lower highs and has been trailing off.
So, after the technical breakout earlier in the year and a nice run up in price, GLD may be taking a shorter term break at these current levels, with potentially stalling weekly upper price/momentum, and maybe an area to consider locking in some shorter term trading gains.
As always, short-term trends can change pretty quickly in this market, so we work hard to stay on top of all of them.
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