Gold Nearing Critical Technical Support
Take a look at technical analysis of gold, the gold miners, and the Gold Bugs Index.
2. Both are nearing critical technical support, and will need to bounce/follow through to the upside soon to save the near-term bull case.
Below are a series of charts that highlight the importance of gold’s macro 61.8 percent Fibonacci retracement level around $158 (using GLD) and the macro 50% Fibonacci retracement level around $40 for GDX. Note that the last chart showing the Gold Bugs Index (INDEXNYSEGIS:HUI) compared to GLD shows that it is also nearing important technical support.
And finally, after leading gold prices higher for years, the Gold Bugs Index has been leading prices lower for the past year -- and this has kept the complex “heavy.”
The character of the price action around these critical technical support levels should be telling. Trade safe, trade disciplined.
Gold – GLD Technical Support Long-Term Chart
Gold – GLD Technical Support Zoom Chart
Gold Miners – GDX Technical Support Long-Term Chart
Gold Bugs Index – HUI Technical Support Long-Term Chart
Editor's Note: Andrew Nyquist is an independent investor based in the Minneapolis area. This article originally appeared on his investing and economics site, See It Market.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.