Gold reversed hard the first day trading of the year, making a bearish triple top, and has continued to be weak since. On a technical basis, the SPDR Gold Trust ETF (GLD) was a great short through the lower trendline of the upper level consolidation, and a re-short on the retest.
Today GLD is gapping down once again (although it is beginning to perk up pre-market). Regardless, Gold is opening near big support at $1310-$1325 and the opportunity could be nigh to buy the dip (or cover shorts if you were brave enough to hold them!) $100/ounce off the high. If you are going to try a long (which I will be looking to do at some point), do it in small size. Although GLD is lifting a bit in the early morning it could certainly hit the 200-day moving average around $1260-$1275, which is also the last breakout that happened in mid-September 2010.
Gold this year is having an identity crisis; not sure if it’s an inflation hedge, a safe haven, or a de facto currency. It also hasn’t been closely correlated to the Dollar. Technically has been the only way to trade it.
*DISCLOSURE: No position
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