Gold ETF GLD bottomed (for now at least) on November 5th of last year at $109.67. Since then it has been grinding its way higher closing today near its most recent high at $122.52. This week it peeked (and closed) above TAOST Value Zone (TVZ) for the first time since last July.
This action is not unexpected in light of pervasive jitters in global markets, not to mention the clustercuf that is FXCM right now. Still, there is enormous weight (resistance) above GLD and structurally it looks highly unlikely to continue higher unabated absent a true global financial crisis.
Specifically, if GLD is a name you trade (or actively watch at least), pay attention to the noted area for hints about the likely direction of near term price action. If price can make it through the noted area and above the upper boundary indicated by the horizontal line between $129 and $130, there is a good chance Gold Bulls are back in the driver’s seat. On the other hand, if price fails here at the downtrend line or before it can clear the noted resistance areas, expect lower prices.
Personally, given the structure, I suspect that this is no more than a normal retracement likely to be followed by a resumption of the downtrend.
But that’s just one trader’s opinion.