This page has been archived and commenting is disabled.

GLD: A Great Set-Up!

thetechnicaltake's picture




 

I am sure you have heard all of the pronouncements that the bull market in gold is over. All sorts of reasons have been given from strength in the Dollar to the "you better run for the hills" price is now under the 200 day moving average for the first time in 10 months. I am not going to "poo poo" the price action, because it has been ugly, but all of the data I can muster shows that the fundamental and technical picture remains bright for gold.

First, this downdraft still remains within in the realm of pullbacks for a gold bull market. Bull market dogma would suggest that a bull market will do its best to throw you off the bull, and I believe that is what we have in this case. Second, the fundamental picture remains bright for precious metals as bond yields appear to be going lower; there is still talk that economy (or stock market) needs a life line. Third, Dollar strength is the time to buy gold. Fourth, investors' sentiment towards gold has not changed. In other words, if gold was entering a bear phase, I contend that investors actions would suggest such a dynamic. Lastly, the longer term (monthly) charts continue to suggest that the bull market in gold is very much intact, and if anything, the recent tumult in prices is a buying opportunity as price is at the bottom of a rising price channel.

Despite all the good, I am not going to minimize the technical damage that has been done. This can be seen in the weekly chart of the SPDR Gold Trust ETF (symbol: GLD). See figure 1. The pink and red dots are key pivot points, which represent the best areas of buying (support) and selling (resistance). The wide range price bar (see red arrow on chart) that closed below the support level at 157.18 is the first sign of technical damage. Support levels should hold, but this one did not, and within the context of positive fundamentals, I would consider this a warning sign.

Figure 1. GLD/ weekly

 

The next level of support (150.10) appears to be holding, and based upon the following daily chart of GLD, the price dynamics are turning bullish. See figure 2. Once again, the gold and black dots represent key pivot levels. This past week prices broke below the key pivot at 151.96, and with today's price action, price is likely to close back above this key pivot point level. Break below support leads to selling. Buyers step in taking prices higher leaving weak hands on the sidelines with remorse for having sold at the lows. Resistance (old support) coincides with the weekly levels at approximately 157.

Figure 2. GLD/ daily

In sum, within the context of the fundamentals, the current technical set up in GLD is compelling. A weekly close above 157 would confirm the idiocy of the crowd, and a weekly close below 150-ish would be reason to step back again from gold.

 

TheTechnicalTake offers an e-newsletter:   It's FREE!

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 01/01/2012 - 10:59 | 2024534 XtraBullish
XtraBullish's picture

Gold and silver are headed MUCH lower...tinfoil hats are no longer in vogue.

Sat, 12/31/2011 - 19:41 | 2024056 hairball48
hairball48's picture

If you can't hold it in your hand, you don't own it. Period.

My gold and silver is where I can lay my hands on it. Granted that I am a very small time investor/holder. I also buy all my gold and silver from the local coin shop. I get "junk silver" at spot. He looks it up on Kitco and I pay the ask price. The premium is very low.

Last I bought Gold it was under a $1000.00 for Krugerands. I paid a $30.00 premium over spot....a bit over 3% at that time.

If you trust the people at GLD and the other "paper" places, fine with me. But I think you're nuts.

Sat, 12/31/2011 - 18:25 | 2024009 Florida Joe
Florida Joe's picture

The 'technical damage" was with low volume in a thin market.

Big guys call it painting the tape. Fundamentalists call it a buying opportunity.

 

 

Sat, 12/31/2011 - 22:33 | 2024227 xela2200
xela2200's picture

painting the tape --> I like that.

Sat, 12/31/2011 - 18:26 | 2023998 Florida Joe
Florida Joe's picture

Y.

 

 

Sat, 12/31/2011 - 17:43 | 2023965 Bartanist
Bartanist's picture

Gold -

One story goes that several hundreds of thousands of years ago, when those "who from the heavens came" to earth; gold was very, very plentiful (common) on the surface of the earth. It is what attracted them to earth in the first place because they had a use for gold that is speculated at, but not currently in the common knowledge (some speculate that it has use as a perfect reflecter of IR energy and other more esoteric uses).

Gold was collected and mined over hundreds of thousands of years and much of the easily collected gold was removed from the surface of the planet over many, many, many years. Ostensibly, because it was prized by those who came here to take it for the uses that they knew of, it was also prized by the local inhabitants and those who they appointed as leaders to take care of the planet and its people.

It is not hard to envision how gold has been perceived as value, but as more and more was collected and more remained on planet a problem arose in that there was too much ... and the average person has very little use (or understanding) for gold. The solution for the powers that be was to collect much of the visible gold through wars and confiscation, keep the full quantity secret and be able to control the "perceived" wealth of earth via fiat... and by controlling the "perceived" wealth, control the people as slaves.

So now we are being told that in the greater world, there are multiple millions of times more gold (held in many places including underground BIS vaults, sunk to the bottom of the ocean ... etc.) than we have been told there is by those who control the supply and the price. Recall that it is common knowledge that for many years the price of gold was SET (yup, just simply "set") in the Rothschild London office. Things are not so different today... but they would like you to believe they are different.

We all know that the debt-money system is a fraud, a form of slavery and a game... althought very serious for those oppressed by it. Gold apparently is the same... at least the manipulation of its relative value is a fraud. In the end, money will not protect us.

Sat, 12/31/2011 - 18:50 | 2024026 Nassim
Nassim's picture

Unadulterated nonsense.

When the province of Victoria, Australia, was settled in the 19th century by the British, gold could clearly be seen in lots of places on the surface - the aborigines had no use for it.

Please keep your extraterrestrial crap for other, specialised, sites.

Sat, 12/31/2011 - 17:44 | 2023969 Bartanist
Bartanist's picture

Of course, this too could also be just a story leaked by the powers that be to manipulate gold demand.

Sat, 12/31/2011 - 16:49 | 2023919 WilliamShatner
WilliamShatner's picture

I'm assuming you guys here have seen this video about the GLD and it's prospectus, but in case you haven't.....

http://www.youtube.com/watch?v=sarZ_Eu6rP4

 

Set course away from GLD, warp factor 8.

Sun, 01/01/2012 - 09:20 | 2024490 JuicedGamma
JuicedGamma's picture

The guy looks nice makes a few good points but honestly could have said in 30 seconds what takes him 7 minutes to spit out.

1 gld trustee is Bank of NY Mellon (yeah the fx guys)
2 hsbc is the custodian
3 if the fund liquidates it will pay you in cash not gold
4 years ago the auditor was fired and replaced by KPMG
5 there is a clause in prospectus that gold may be lost, stolen or damaged, most prospectus have this kind of legalese but "damaged" gold is funny as the reporter notes. Maybe some alchemist will change it to lead.
6 the gubmint can step in and seize your gold very easily, it's all pooled.

The biggest take away is that the funds trustee is non other than BNY the crooks that brought you forex skimming ala backdating trades for pension funds (grandma and orphans).

What he fails to say is what Kyle Bass noted about the Comex, it's most likely impossible for someone to walk in and find their actual piece of gold, somewhat like what MF Globals PM storage customers found with Corzine's crooks as custodian.

Sat, 12/31/2011 - 14:34 | 2023735 Spartaguy
Spartaguy's picture

Got GLD?  hA!

 

http://www.aintmymedia.com/

Sat, 12/31/2011 - 12:19 | 2023596 catch edge ghost
catch edge ghost's picture

GC

I watched it all night on the 28th and early AM on the 29th. When it got under 1550 I set an order to buy 1525 and waited. It turned back up and held for a couple hours so I cancelled my lotto play.

Of course then it hit 1524 only a couple of hours later...

So I drew a line at 20% down from the year's high, 1539, and went to bed. When I looked at it after the close the next day and saw it banging off that all day long, I told myself I was a genius and would be rewarded for my patience.

Of course then it went up 40 bucks...

I believe the next lotto level is at 1462, for 24% down, and only because that will make for a nice goldbug bashing headline.

Sat, 12/31/2011 - 12:45 | 2023608 Non Passaran
Non Passaran's picture

I kind of perversely hope it'll do that so that I can buy more. What I got, I ain't selling.

Sat, 12/31/2011 - 11:31 | 2023551 San Diego Gold Bug
San Diego Gold Bug's picture

Keep buying phyzz.  Thanks to the ZH person who mentioned comparesilverprices.com.  saved me some good money.

Sat, 12/31/2011 - 08:32 | 2023442 adonisdemilo
adonisdemilo's picture

If you omitted the correlation between GOLD and GLD I can see your argument.

Unfortunately there is a disconnect between the two

Only the trolls would advocate buying GLD, many, many people on this site wouldn't touch it with a barge pole.

It's about as safe as the dollar

Sat, 12/31/2011 - 06:50 | 2023413 carambar
carambar's picture

the author writes "I am sure you have heard all of the pronouncements that the bull market in gold is over."

this is completly dellusional. the papers/article ratio is 10 gold bull vs 1 bear.  you are blind in your own bubble.

 

Sun, 01/01/2012 - 08:45 | 2024481 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

depends if you're looking mainstream or alternative

Sat, 12/31/2011 - 03:20 | 2023351 Augustus
Augustus's picture

Nicolas Darvas sold GLD some time ago.  If it is going higher, let the price confirm it.

Sat, 12/31/2011 - 02:14 | 2023303 San Diego Gold Bug
San Diego Gold Bug's picture

Cashed out the balance of my ira this week and backed the truck up for more phyzz gold.  900AGE's this week.  i will send the pic when i get them next week.  Bite me Benny B and Tiny Tim!!  Special thanks to the reader on this site that mentioned comparegoldprices.com.  Saved me some good money this week!!

Sat, 12/31/2011 - 16:07 | 2023880 fiddler_on_the_roof
fiddler_on_the_roof's picture

you should be rich. you bought Gold worth $1.5Million. WOW.

Sat, 12/31/2011 - 08:01 | 2023436 JuicedGamma
JuicedGamma's picture

Don't forget to thank the Maestro, he really got all this started.

Sat, 12/31/2011 - 01:15 | 2023252 toadold
toadold's picture

While I'm an enthusiast for gold, I'm not a puritain whenit comes to the form of possession in part because all forms of possesion have risks attached just different forms of risk. Large amount of the physical gold in personal possession has this risk of physical theft for instance. Depending on individual circumstance the cost of safe guarding the PM can get dang inconvenient one way or another. It might be better to deversifiy the way one holds gold, some on hand, some in non-ban storage, and some in a nasty old gold ETF.  Before you throw rocks at the idea of a gold ETF consider, they are quite liquid, difficult for a crack hand or other addict to steal, and have a certain protection in that some of the other investors are quite nasty to mess with. You may now throw rocks. 

Sat, 12/31/2011 - 15:56 | 2023872 DosZap
DosZap's picture

toadold

 

 difficult for a crack hand or other addict to steal, and have a certain protection in that some of the other investors are quite nasty to mess with.

True, this way you GIVE the criminals the right to steal it............smooth move.As for protection, READ the fine print.Damn, some folks just do not get it.

Plus,THEY SCREW up the real price basis for PM's.

 

Sat, 12/31/2011 - 13:08 | 2023633 Non Passaran
Non Passaran's picture

Fair enough, but about this:

>Before you throw rocks at the idea of a gold ETF consider, they are quite liquid, difficult for a crack hand or other addict to steal

Ex-customers of MF Global beg to differ.

I'm like you, but don't forget about that risk.

Happy New Year!


Sun, 01/01/2012 - 08:49 | 2024482 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

I'm thinking along similer lines, but wouldn't touch an ETF...why not goldmoney.com or bullionvault??

I also have family in australia - a comparitavely safe land, and I keep bullion with them too (I'm from the uk)

Sat, 12/31/2011 - 00:35 | 2023220 AndrewCostello
AndrewCostello's picture

The entire market is a fantasy run by criminals.  Personally, I stick to real physical gold and silver.  They've never let me down in the long term.

 

If you want to do really well in the 21st Century, then read:

http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref

Sat, 12/31/2011 - 00:23 | 2023209 Bagbalm
Bagbalm's picture

If gold is going to crash then the entire nationwide scheme we have witnessed to suck every ounce of metal that could be had by gold parties and signs in jewelry store windows and clowns waving signs at traffic to come in and sell any tiny scrap you can find was a failure. I don't believe that for a second.

Fri, 12/30/2011 - 23:52 | 2023170 Bansters-in-my-...
Bansters-in-my- feces's picture

You can tell the fucking bankers (thiefs) set up GLD...They even stole the O out of it.

Fuck you's Bankers

Fri, 12/30/2011 - 23:32 | 2023149 Bansters-in-my-...
Bansters-in-my- feces's picture

Charts,and technicals...all bullshit.

Golds price is what the PPT and the Central Banker fuckers will let it be.

Ps...

Fuck you Ben and Timmy.

Sat, 12/31/2011 - 00:35 | 2023221 luna_man
luna_man's picture

 

 

"Charts, and technicals...all bullshit."

If you don't use "Charts & Technicals", what do you use to enter or exit your position?...Jim Cramer?

Sat, 12/31/2011 - 03:09 | 2023345 StychoKiller
StychoKiller's picture

Hmm...so, do you buy and sell your life/auto insurance policies as well?  Just asking, because Au/Ag is wealth "insurance," NOT just an investment.

Fri, 12/30/2011 - 23:32 | 2023146 Darth Silver
Darth Silver's picture

a sucker is born every day.   buying slv or gld is like picking dimes off a train track.  seems simple at the time.

the two vehicles were set up to support the fiat system.  they create artificial supply of gold and silver to keep investors from taking delivery.  once fiduciaries start to realize their true responsibility (ala kyle bass) and take delivery, the house of cards evaporates and gld goes massively down while gold goes parabolic.  imagine the lawsuits then.

i am sure it will be a voluntary event.

Sat, 12/31/2011 - 23:51 | 2024292 sbfeibish
sbfeibish's picture

I'm glad GLD and SLV exist.  If you don't have a futures account, they give you a chance to hedge your bullion with shorts and put options.  (To be honest, I haven't used that strategy yet.)

Sat, 12/31/2011 - 08:12 | 2023438 JuicedGamma
JuicedGamma's picture

http://www.zerohedge.com/news/kyle-bass-explains-new-world-order

For anyone who has not seen this interview, highly recommend it. Especially interesting is the part where Kyle talks about taking $1 billion in Comex physical delivery as his "fiduciary responsibility" for one of funds he advises.

Fri, 12/30/2011 - 22:36 | 2023113 Paul Thomason
Paul Thomason's picture

The GLD turned bearish today in our medium to long term analytics.  It's going down for at least several months.

GLD is still in an obvious long term up trend but the trigger today suggests at least several months of lower prices, possibly a year or two.

Once the down is done the uptrend should resume nicely, but there is a lot of correcting ahead for GLD before that day arrives.

Fri, 12/30/2011 - 21:36 | 2023022 jackinrichmond
jackinrichmond's picture

why would anyone in their right mind buy SLV or GLD when you could buy PSLV or PHYS ?

with the sprott funds, redemptions are available (in bar denominations) and the inventory is audited by the canadian mint.. ( i think the metals are actually stored at the mint too.)

versus...  ishare's infamous 'smoke & mirror' contract.   you need a lawyer to understand it..

sprott's doing a lot for the p.m. industry..  when was the last time you heard about anything ishares did to promote gold or silver ?   sometimes i wonder if SLV & GLD actually dilute the price of bullion...

to me, it's a no brainer..  if you have to hold paper bullion, buy PSLV or PHYS.

Sat, 12/31/2011 - 15:30 | 2023832 DosZap
DosZap's picture

jackinrichmond

redemptions are available (in bar denominations)

Yeah, if you have 400oz in it you can redeem it.

Silver is I believe 1000oz min.

Sat, 12/31/2011 - 02:10 | 2023299 San Diego Gold Bug
San Diego Gold Bug's picture

If you buy phyzz, check this sight ou that I saw on Tf metals last week....comparegoldprices.com. Great resource.

Fri, 12/30/2011 - 21:21 | 2022991 thepixelpusher
thepixelpusher's picture

I sold GLD and went CEF and Sprott for 401K too. Still I worry that I should buy Physical and have it stored under the Sterling Trust. Wouldn't that be safer than CEF & Sprott? Or is CEF in Canada superior? Certainly, CEF/Sprott is more liquid, but sells at a premium to physical. I can't hold my physical myself unless I'm self-employed and get a soloIRA.

Fri, 12/30/2011 - 21:38 | 2023031 jackinrichmond
jackinrichmond's picture

pixel,  i used to worry about the premium for sprott also..  

look at it this way, if you buy PSLV at a 20% premium and you sell at a 20% premium, where's the loss ? 

Fri, 12/30/2011 - 23:32 | 2023147 thepixelpusher
thepixelpusher's picture

The question I still struggle with my IRA precious metals in CEF and Sprott is that I don't hold it. To be fair the physical in a 401K Sterling trust is not held by me either. Also, if I file correctly the CEF, Sprott is taxed 15% and not the 25% of physically held metals when sold. But, I keep hearing if you don't hold it you don't own it. I won't liquidate my IRA to guarantee my loss since Govt. takes 40% if I liquidate. CEF, Sprott is more liquid than physical if I need to turn a fast corner in investing. Though I'll not let the current drop shake me from my precious metals investment.

Sat, 12/31/2011 - 15:49 | 2023863 DosZap
DosZap's picture

thepixelpusher

I won't liquidate my IRA to guarantee my loss since Govt. takes 40% if I liquidate.

Either under 59.5 yrs old, and /or make a hell of a lot of money if your in that tax bracket.

Wait until your IRA Tax rate is 50% no matter the age.It's coming, or out right seizure, or a devaluation in USD's makes that 40% seem like a DREAM.

Sat, 12/31/2011 - 15:42 | 2023853 DosZap
DosZap's picture

thepixelpusher

 not the 25% of physically held metals when sold.

 

Only if sold after 12 months,10% otherwise.

Sat, 12/31/2011 - 06:51 | 2023414 WhiteNight123129
WhiteNight123129's picture

In the Silver and Gold market what is the comparable value of a "market" where you get ripped off like MF Global client Celente or HSBC client? Now PSLV is only 770 million, but then if you leverage as much as COMEX, shouldn't SPROTT be equivalent to tens of billions of trade in paper parlance. So where is the right market ? What is the dog and what is the tail?

Fri, 12/30/2011 - 21:13 | 2022990 thepixelpusher
thepixelpusher's picture

double post

Fri, 12/30/2011 - 20:36 | 2022925 devo
devo's picture

Shorting GLD is a great idea. That thing is going to implode one day. No chance they have that much gold. I'd imagine spot price will be up quite a bit once that's discovered. I mean, that ETF is clearly just a ruse to get money out of gold and into dollars. It's genius, actually (gotta hand it to bankers, they are clever), but eventually it'll fail.

Fri, 12/30/2011 - 20:31 | 2022902 devo
devo's picture

Do fundementals/charts really matter in this instance? It is clear why gold sold off...

To me it's like saying the "flash crash" destroyed charts in 2010.

 

Fri, 12/30/2011 - 19:48 | 2022854 DymanicDoug
DymanicDoug's picture

HA HA HA HA HA..fukushima live-Cam birth of baby godzilla...

Sat, 12/31/2011 - 03:04 | 2023341 StychoKiller
StychoKiller's picture

You really do NOT want to be standing between those stirrups...

Fri, 12/30/2011 - 19:02 | 2022765 laosuwan
laosuwan's picture

so why didn't your analaysis tell us to wait until now to buy?

Do NOT follow this link or you will be banned from the site!