We last looked at gold back in July when it was breaking out of a pennant pattern. Gold and silver have both been experiencing some strong price action here recently after the break. Gold (GLD) has come up to its 150-day moving average at $159.37, which has acted as support and resistance since 2010. It will likely take some strong buyers to advance from here.
The gold miners (GDX) ETF is also at an interesting level of resistance. The chart below shows a falling trendline that has been support 5 times since 2010 and then was resistance earlier this year. I’ll be watching to see if this resistance can hold or if gold miners can break free.
Between the moving average resistance in GLD and the trendline resistance in GDX, gold bulls have a lot of work to do in order to continue this advance.
UPDATE: Once we got the minutes from the last FOMC meeting, nearly all "risk on" assets took flight, including gold. Currently these levels of resistance have been broken but still are likely to be important levels to watch going forward.
Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer.
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Golden Resistance
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