Gold has been a terrible investment over the past several years, and while bulls expect inflationary pressures to put a bid under the metal, it doesn't appear they're winning.
Looking at GLD as a proxy, we've just violated major support. How major? We've broken the trend line going back to GLD's inception in the mid aughts. This monthly chart shows that we could be set to plummet for quite a while longer, as my oscillators are signaling sell (again, on a monthly time frame). Exacerbating the fall is the lack of meaningful inflation, but that, of course, may change in the coming months and years as growth accelerates and central banks unwind balance sheets.
Short term, I expect a bounce from this $118 level up to the support-turned-resistance trend line. So, I'm actually going long for the bounce, but I'll be looking to switch teams as prices rise and position for another leg lower.
Support is at par, or $100 (or spot gold at about $1,000).
Looking at GLD as a proxy, we've just violated major support. How major? We've broken the trend line going back to GLD's inception in the mid aughts. This monthly chart shows that we could be set to plummet for quite a while longer, as my oscillators are signaling sell (again, on a monthly time frame). Exacerbating the fall is the lack of meaningful inflation, but that, of course, may change in the coming months and years as growth accelerates and central banks unwind balance sheets.
Short term, I expect a bounce from this $118 level up to the support-turned-resistance trend line. So, I'm actually going long for the bounce, but I'll be looking to switch teams as prices rise and position for another leg lower.
Support is at par, or $100 (or spot gold at about $1,000).