Friday’s ETF Chart To Watch: State Street SPDR Gold Trust (GLD)

by on March 9, 2012 | ETFs Mentioned:

After evading the headlines for quite a while, Greek debt woes resurfaced earlier in the week, bringing back the cloud of uncertainty looming over the debt burdened currency bloc. With renewed uncertainties came volatile price action and equity markets went for a ride, bringing a halt to euphoria on Wall Street. Despite this bump in the road to recovery, equity benchmarks have been able to regain their ground as optimism surrounding the Greek bailout has been strong [see also Highlighting The Kings Of The Dividend ETFs].

 Gold failed to take on safe haven appeal once Greek drama stole the headlines; futures prices for the precious metal dipped below the $1,700 level, hitting a recent low of $1,663 an ounce on Tuesday morning. Prices have regained lost ground although today’s U.S. unemployment report could pave the way for more volatility in gold prices as investors weight the health of the domestic labor market. Our ETF to watch for the day is the well-known SPDR Gold Trust (GLD) which may experience an increase in trading volumes as economic data hits the street; analysts are expecting for the unemployment rate to come in unchanged at 8.3% [see GLD Realtime Rating].

Chart Analysis

GLD have come under pressure ever since failing to break resistance at the $1,800 level 2/29/2012; this is a noteworthy observation seeing as how this ETF previously failed to break above the same level back on 11/8/2011. Another cause for concern is the relatively high volume that came with the sell-off last week on 2/29/2012. Trading volumes that day were at their highest levels since the previous major sell-off that came after gold prices hit $1,923 an ounce [see Gold Hits Resistance, Time To Worry?]

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On the contrary, one piece of bullish evidence that may point to higher prices is the fact that GLD appears to have bounced off its 200-day moving average (yellow line). GLD has been rising since the start of 2012 and the recent pullback could merely be a correction in an ongoing uptrend [see GLD Technicals].


Better-than-expected unemployment data will likely bring back the bulls on Wall Street, which could translate into selling pressures across safe haven assets, including gold. GLD will look to establish support above $165 a share in the coming days, assuming the longer-term uptrend is still in tact [see GLD-Free Gold Bug ETFdb Portfolio]. However, if the price falls below the $160 level, selling pressures could accelerate as GLD looks to retest support near $150 a share. If the jobs data disappoints however, GLD could find itself climbing higher; short-term traders should consider taking profits near the $170 mark seeing as how this is the first level of potential resistance, followed by the $175 level. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit taking techniques.

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