Another Potentially Huge Trade Developing in Gold or the GLD or DGP ETF

It is time to start paying serious attention again to the gold market and the gold price.  One of the things that fascinates me the most about markets is their ability to get people to essentially ‘fall asleep’ and basically forget about the previous excitement that was in full force.

The excitement I am referring to was the persistent run in the gold price towards the 1200 range.  That was a huge move and a very nice persistent move.  But since that early December 2009 high, the gold price has drifted sideways to down and held up remarkably well considering how strong the US dollar rally has been.

But once again I think the GLD and the DGP are worthy of close monitoring.  More specifically the GLD breaking above 114 would be for me a key event and signal that the gold price wants to get another big move towards 1400.  But the GLD ETF must be able to get above 114, otherwise it could drift sideways for another month or so to complete this consolidation.


As of this post, I cannot really say that there is a technical event that is urgently actionable.  Instead the most I can say at this point is that the GLD is getting very close to an actionable event but is not quite there yet.  There is always the temptation to jump in before any real trigger occurs for fear of missing the extra few upside percentage gains.  Jumping in now would still be a mistake in my opinion unless you want to take the risk of sitting through a possible 1 month further consolidation. 

So the main point of this post is basically to say that I believe the GLD or the gold price is acting very confident now and is getting some initial running legs for a jump over the 114 level.  How soon it is able to do that remains an open question.  There should be some sellers at the 114 swing high, and probably enough of them to get a mini shakeout at that resistance level.  So we could be talking another 2 weeks to 4 weeks before the renewed uptrend begins ?

Note also the possible tendency towards another head and shoulders bottoming formation.  It is quite a complex formation and not so clean, so the remaining right side of this formation could be somewhat sloppy.

On the other hand I could be wrong about the time duration till above 114.  We will just have to wait and see if gold can muster up enough courage when it gets to the 114 range.

Posted in Gold Market

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