Trade Set-Ups For Gold (GLD, IAU, SGOL, PHYS)

While many remain bullish on gold, the recent trading activity has been impossible to ignore.  Our technical analysis affiliate, Adam Hewison of INO, has a quick yet detailed audio-visual interactive chart analysis discussing where gold is heading from here.  While a longer-term bullish pattern is in place, there has been some damage done to gold and this will be key for the SPDR Gold Shares (NYSE: GLD), iShares COMEX Gold Trust (NYSE: IAU), ETFS Physical Swiss Gold Shares (NYSE: SGOL) and even in the Sprott Physical Gold Trust ETV (NYSE: PHYS).

As with all huge moves to the upside that see a large decline, many may feel that gold may be a buy because of the dip.  There are still those who expect gold to go to $1,500 or $2,000 per ounce.  The difference here is that the recent drop from over $1,250 and $1,260 in June to in June down to under $1,180 this morning may be sending a different message on the timing.

There is good news here in this downward move for the rest of the world that does not stand to benefit at all from the endless rise in gold prices.  The drop is both a (potential) move away from inflation and a move away from the panic trade that physical money around the world will be worth much less than hard assets in the years ahead.

Hewison is looking for Fibonacci retracement levels around $1,157 first and then $1,132 second, with a move higher to follow.  The long-term trend remains positive, while the short-term trend remains weak today.

One issue we are looking at that Hewison did not yet note was the key longer-term moving averages.  For this moving average analysis we tend to track the SPDR Gold Shares (NYSE: GLD) rather than gold itself because the 9:30 AM open and the 4:00 PM close each days gives more intra-day analysis for tracking gold moves over the spot prices that trade globally.

The 50-day moving average is now $119.18 on the GLD and it has been impossible to miss the trend that the GLD has used that rolling 50-day moving average as resistance all month.  The much more defining 200-day moving average is $111.70 for the GLD.  That was tested for the downside support back in April-2009 under $90 but the GLD has remained above this 200-day moving average since the real breakout in January-2009. Moving average charts can be seen with changes to daily gold moving averages at stockcharts.com.

Will the price dip down that low?  You never know, but it easily could.  It also needs to be considered that the 200-day moving average is still trending higher much more rapidly than many charts because gold is over $200.00 higher than it was a year ago.

The SPDR Gold Shares (NYSE: GLD) is back up in positive territory today now that gold has bounced.  Shares are up 0.5% at $116.35 and the 52-week trading range is $90.81 to $123.56.

The iShares COMEX Gold Trust (NYSE: IAU) is up 0.6% at $11.65 and its 52-week range is $9.09 to $12.37.

ETFS Physical Swiss Gold Shares (NYSE: SGOL) is up 0.55% at $118.65 and its 52-week range is actually less time because it has not been public for a full year yet.  Its range is $98.67 to $125.90.

Sprott Physical Gold Trust ETV (NYSE: PHYS) is often more volatile and its shares are up 1.1% at $10.96.  It is even newer than the SGOL and its trading range is $9.48 to $13.07.

JON C. OGG