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July 26, 2005
Gold Finds Support
While the Dollar surged in June, gold also surged and this challenged the inverse relationship that held sway over the last few years. However, gold came down quite hard in July and has yet to fully recover. Perhaps this relationship is back on.
The overall pattern looks like a triangle and GLD is bouncing off support from the lower trendline and May low. Upside volume is outpacing downside volume. The early June advance featured above average volume. After the decline below 42.5, upside volume picked up again. This is positive, but GLD needs to break above the early July high (42.7) to solidify this reversal attempt. A failure and break below 41.5 would be most bearish and target a move to 40.
Posted by Arthur B. Hill at July 26, 2005 07:35 AM