This morning spot gold is declining lower by 9.70 to $1178.70 an ounce. The popular SPDR Gold Shares (NYSE:GLD) are trading lower by 1.31 to $115.40. This decline comes in gold even as the stock market indexes are bouncing a little bit higher today. This is telling us that deflation is now front and center and the major market indexes will also face this selling pressure after every rally or bounce. That is how deflation works as it will take everything lower. Since 2001 gold has been in a bull market making new highs in 2010. Please remember that the only way that the market indexes can go up and trade higher is if gold trades higher ultimately. It is possible that the major stock indexes can trade higher without gold, however, that should not last long. Meanwhile, gold can and has traded higher without the market.
Gold mining stocks are also under pressure today. The Market Vectors Gold Miners ETF (NYSE:GDX)
is trading lower by 0.67 to $47.87. The GDX should have some daily support around the $47.50 area in the near term. Should this support level fail to hold for the GDX then the $46.00 area would be the next important support area for this highly popular ETF.
Randgold Resources LTD (NASDAQ:GOLD) is trading lower this morning by 0.37 to $90.78. Rangold LTD will have some daily chart support around this current level do to the daily 50 moving average being of some support. Should the stock break below the 50 moving average support area the $87.50 level would be the next daily chart support area.
Yamana Gold Inc (NYSE:AUY) is under pressure this morning trading lower by 0.13 to $9.40. This stock is now trading at a new low for 2010. Yamana Gold inc will have important support around the $9.00 level and more around $8.25. Both of these area could be potential short term bounce areas for this stock.
Gold and gold miners both remain under pressure this morning. While gold often trades higher when the markets rally it is rare to see the markets rally higher without gold. Therefore, it is always important to be cautious of any market rally when gold id declining. Remember gold trades higher as the markets get inflated and often when fear enters the hearts of investors. Continue to watch gold very closely here as it holds a lot of the keys for the major market indexes worldwide.
Nicholas Santiago
Chief Market Strategist
www.InTheMoneyStocks.com
