The Line In The Sand For Gold

While the SPDR Gold Trust (GLD) is having a solid day of trading today, there is some developments that should be of concern for you traders holding a long position in it. 

double top trade setup in gld gold

 

Now, I'm not saying to short it right here, right now. Far from it, because it could easily breakout to new highs in the near-term and if so should lead to further price expansion. 

But as it stands right now, there is a glaring double top forming on its daily chart that you have to pay attention to. 

So this is what I would say: while it trades sideways between $125 and $130-ish, all is well. There wouldn't be any reason to short the stock. Drop below $125, and I think you have a very good reason to get short on GLD

If you get short though, don't expect it to be some magic carpet ride for you. There is a major rising trend-line off of last December's lows that will come into play in the low $123's. If that price level breaks, then you have a much bigger move on your hands that should send price down to $115. 

So those are the parameters to work with. 

gld swing trade short setup

 

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Kyle Soto 8 years ago Member's comment

"While the SPDR Gold Trust (GLD) is having a solid day of trading today, there is some developments that should be of concern for you traders holding a long position in it."

As someone doing his due diligence into SPDR Gold Trust (GLD), I'd really like to know why I'm seeing the following clause in the GLD prospectus: "In addition, the Trustee has no right to visit the premises of any subcustodian for the purposes of examining the Trust's gold or any records maintained by the subcustodian, and no subcustodian is obligated to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of such subcustodian." What is the purpose of this audit loophole? Additionally, the GLD organizations promise that this fund is 100% backed by actual physical gold but yet they absolutely refuse to give retail investors the right to any of their claimed physical gold. I've also discovered a number of other issues along the way:

"CNBC's Bob Pisani made a highly publicized visit to GLD's gold vault in a segment called Gold Rush: The Mother Lode. GLD's administration organized this visit to show that GLD's gold actually exists. However, the gold bar held up by Mr. Pisani showed a serial number of ZJ6752 which did not show up on the latest bar list during that time. It was later found that this "GLD" bar actually belonged to ETF Securities."

"Did anyone try calling the GLD hotline at (866) 320 4053 in search of numerical details on GLD's insurance? The prospectus vaguely states "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." When I asked about how much of the gold was insured, the representative proceeded to act as if he didn't know and said they were just the "marketing agent" for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors."