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

by on August 3, 2012 | ETFs Mentioned:

Equity markets went for another ride down the hill yesterday as comments from the European Central Bank earlier in the day left investors hoping for more. ECB President Draghi sparked a sell-off as he failed to offer new stimulus measures. Many had anticipated such an offer following his comments from last week when he promised that policymakers would take whatever means necessary to ensure the unity and stability of the debt-burdened currency bloc. Michelle Gibley, director of international research at Charles Schwab, commented, “There is still hope, because he did talk about nonstandard measures that will be looked at in coming weeks” [see also ETFs To Hedge Rising Prices At The Pump]. 

After concerning comments about the state of the domestic economy from the FOMC earlier in the week, investors will keep a close watch on today’s employment report. As such, the State Street SPDR Gold Trust (GLD, A) could experience volatile trading as the latest nonfarm payrolls data hits the street. Analysts are expecting for the figure to come in at 100,000, marking a modest increase from last month’s 80,000 jobs [see also GLD-Free Gold Bug Portfolio]. 

Chart Analysis

GLD continues to trade along a slowly rising support line, although its upside remains capped at the $160 level. Notice how this ETF has been trading above the steadily rising blue support line, perhaps suggesting that bullish pressures are building. What’s concerning, however, is the fact that while GLD has been posting higher-lows, the ETF has also failed to summit the $160 level on several occasions over the past two months [see also 3 ETF Trading Tips You Are Missing]. 

Click To Enlarge

Notice how GLD encountered resistance around $158 a share on June 6, June 15, July 3 and most recently on July 27, 2012. It’s very likely that GLD is building positive momentum; however, a break above the $160 level will be required to confirm that it has in fact resumed its longer-term uptrend [see also 17 ETFs For Day Traders]. 


If today’s unemployment report brings back the bulls, safe havens like gold could tumble lower; in terms of downside, GLD has support at the $152.50 level followed by $150 a share. On the other hand, if bullish pressures permeate the gold market, GLD could soar higher towards $157.50 a share, although major resistance lies right around the $158 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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Disclosure: No positions at time of writing.