As a followup on the latest All That Glitters post, I wanted to provide an update on the trading in bold the Gold Spider ETF (ticker GLD) and thew Market Vectors Gold Miner ETF (ticker GDX).
Looking at the GLD
The GLD has rebounded nicely off the lows, taking back 5 points off the recent low. However, this has come on low volume conviction on the upside. Essentially, the price of the GLD has retested the $156 price ceiling that developed on the February 15th gap down. Although strong volume conviction is not entirely necessary to get any investment moving in one direction or another, I think that lack of demand on the upside here does put a retest of the recent lows in play. Additionally, you would think that the recent troubles in Cyprus would have put more conviction behind gold that we have seen.
Turning to the GDX
Outside of the March 6 trading day, where 33.8 million shares traded hands, we just have not seen much volume conviction on the point or two upside move in the GDX. This has occurred despite a rebound a gold, which I think is another indicator suggesting a pullback to lows in gold. Additionally, the March 6th updraft brought the ETF back up to the February 20th low, a test of that pricing level, where more than 37 million shares traded hands.
I may sound overly negative here, but you should not take that as meaning I am bearish on gold or gold stocks. I think that gold and the precious metal stocks may be entering a trading range here, and one should accumulate when price approach the lows. Additionally, all is it not negative in the gold space. Although I did not provide the chart, the Junior Gold Miner ETF (ticker GDXJ) is showing strength.
Looking at the GLD
The GLD has rebounded nicely off the lows, taking back 5 points off the recent low. However, this has come on low volume conviction on the upside. Essentially, the price of the GLD has retested the $156 price ceiling that developed on the February 15th gap down. Although strong volume conviction is not entirely necessary to get any investment moving in one direction or another, I think that lack of demand on the upside here does put a retest of the recent lows in play. Additionally, you would think that the recent troubles in Cyprus would have put more conviction behind gold that we have seen.
Turning to the GDX
I may sound overly negative here, but you should not take that as meaning I am bearish on gold or gold stocks. I think that gold and the precious metal stocks may be entering a trading range here, and one should accumulate when price approach the lows. Additionally, all is it not negative in the gold space. Although I did not provide the chart, the Junior Gold Miner ETF (ticker GDXJ) is showing strength.
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