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Thursday, July 12, 2012

Gold ETFs are Nearing Breakout Levels

NYC - FiDi: American Stock Exchange Building
NYC - FiDi: American Stock Exchange Building (Photo credit: wallyg)
Gold prices have stabilized in recent weeks, moving within a range between the May low and June high price. But as gold nears a couple key support levels, a breakout is becoming a possibility. Gold-related ETFs provide a way for investors to participate in the movement of gold prices - both directly and indirectly. Four actively traded gold-related ETFs provide slightly different trade set-ups, but all are affected by the movement of gold prices. With the potential for a big move to ensue following the breakout, now is a good time to watching gold-related ETFs. The SPDR Gold Shares (ARCA:GLD) ETF is one of the most popular gold ETFs. The ETF seeks to replicate, net of expenses, the price movement of gold. After hitting an all-time at $185.85 on September 6, 2011 the ETF has been in a downtrend. On December 29, the ETF put in a 52-week low at $148.27, a level that has not been seen since. This is primary support, which if broken, would break a large triangle formation signaling a further slide in the price of the ETF. The long-term targets for such a move are $123 and $111.50. Before that occurs, though, there is support at $150 and also $148.60. On the other hand, a rise back above the June 6 intra-day high at $159.20 could spark some buying interest, propelling the ETF into trendline resistance currently at $165. ... Continue to read.
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