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

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The Dow Jones Industrial Average climbed further into previously uncharted territory yesterday as upbeat weekly jobless claims data kept euphoria levels elevated. Buying pressures were a dominant theme after the weekly jobless claims figure came in at 340,000, showing a healthy improvement over the previous figure of 347,000. With housing and labor market data both showing consistent signs of improvement over the past few months, investors are finally recognizing the fact the U.S. recovery is very much alive and kicking [see How To Take Profits And Cut Losses When Trading ETFs].

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With U.S. employment data slated to come out later today, our focus will shift onto the State Street SPDR Gold Trust (GLD, A), which has been severely beaten down since the start of 2013. Gold prices may see volatile trading today as investors move in and out of the yellow safe haven depending on the latest employment figures; analysts are expecting for the unemployment rate to remain unchanged at 7.9% [see GLD-Free Gold Bug ETFdb Portfolio].

Chart Analysis

Since the start of the year GLD has gotten absolutely hammered while equity markets have enjoyed a stellar bull run, showcasing investors’ appetites for risky assets. This ETF has pumped the breaks in recent weeks and appears to be finding its footing right along a major support level; notice how GLD previously bounced off the $150 level (blue line) back at the end of 2011 and later again in mid-2012. In each instance, GLD was able to rebound off this level and surge higher in the coming weeks, which makes entering in at current level attractive for those with a stomach for risk [see also Free Report: How  To Pick The Right ETF Every Time].

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What’s worrisome is that GLD has posted lower-highs and lower-lows (red line) since failing to summit $175 a share during October of last year. We advise conservative investors to hold off until GLD has established support above its 200-day moving average before jumping in long [see ETF Technical Trading FAQ].


If the latest unemployment report comes in better than expected, selling pressures in the gold market will likely persist; in terms of downside, GLD has immediate support at $150 a share. On the other hand, worrisome employment data could inspire a rally for the yellow metal; in terms of upside, this ETF has resistance around the $160 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.

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