Hot on the heels of the latest revelations in the Trump-blabbing-secrets story, gold popped overnight. Right around 7:30 last night Eastern time, GLD popped up through the 118 level we’ve been watching. This is one of our key levels – where investors seem to be making entry and exit decisions at a much higher rate.
The 6-month chart shows that GLD continued up to its 120 level the last four times it went above 118 in a row. But, the 2 times before that it didn’t make it to 120. So it’s a bit of a horse race, as they say in Kentucky. Meaning it might go to 120, and it might not.
This is nothing new in the world of gold trading. The market does what the market wants to do, every time. Our job is not to force it to do what we want – not rich enough to do that! – but rather to make intelligent risk-reward trades as they present themselves.
One thing we do want to note is the recent low (trough bottom, valley, wave etc) of GLD is higher than the previous low. And the recent high was higher than the previous high. Higher highs and higher lows are the definition of an uptrend…
So your friendly Gold Enthusiast is advising that if you want to pick up “something in the gold sector,” now isn’t a bad time to pick up a SMALL position in your favorite gold vehicle. Whether it’s one of the good senior minors, one of the great juniors, or just some good ol’ GLD to tuck away for a while.
If GLD gets near 120, watch for reversal signs, and don’t hesitate to sell and take some short-term gains. Remember we’re not expecting a continued rise out of gold-anything until at least mid-summer, when the GDXJ juggling is scheduled to be completed, and the world knows more about its various trouble spots. For now the geopolitical posturing continues without looking like it’s getting “very serious”, which is a good thing for sleeping at night. This current thrash is thrashing, and you can always buy back in later.
But please for now go small! And/or plan to hold for a while yet.
Signed, The Gold Enthusiast
DISCLAIMER: As of the time of writing, the author held no positions in any mentioned security (GLD), with no plans to trade GLD in the next 48 hours. For full disclosure the author is long NUGT and JNUG.