On CNBC today Dennis Gartman recommended owning GLD in non-US Dollar terms (GLD/FXB (pound), GLD/FXY (yen), GLD/FXE etc). This is nothing new, in late February Gartman said to short Euros in Gold and since then FXE/GLD lost 22%.
SLV and GDX are testing important levels and GLD/UUP (Gold/Dollar ratio/chart 4) is being squeezed in a symmetrical triangle point. See posts from last week (1, 2). Overnight Update: XAUUSD spot is up 0.40% to $1243.20 right at the May highs. Keep an eye on the gold miners (Chart 6). In May, GDX was the only laggard when GLD, SLV and GDXJ (junior miners) broke above resistance, before the failure.
SLV (chart 5) is trading in a decent ascending channel but needs to break ceiling resistance. I also compared the gold volatility index (GVZ) to GLD in chart 7. GVZ made higher highs recently which is interesting. Look how spikes in implied volatility moved with previous moves in GLD. Spikes in GVZ implied both breakouts and breakdowns in GLD.
If for any reason GLD fails to make new highs, the 50 day moving average, long term uptrend line and 200 day moving average are support levels. If the uptrend gets taken out there could be a $100 support test and structural decision. Options on GLD look expensive compared to April when GVZ bottomed out (GVZ measures GLD implied volatility using GLD option premiums, learn more at CBOE.com). Btw, a week ago INO's market club service said all 3 trade triangles were green for gold (video). Here you gold bugs go for good luck, Gold's 'Real Move' to $7,000 Coming: Asset Manager (GoldSwitzerland.com) - CNBC.
1) DXY (US Dollar Index since 1992 with MACD)
|Courtesy of FreeStockCharts.com|
2) GLD (SPDR Gold ETF Long Term)
|Courtesy of StockCharts.com|
3) GLD (near term ascending triangle, potential breakout area)
4) GLD/UUP (Gold/US Dollar Index ETF) - Inflection point
5) SLV ascending channel/triangle
6) GDX (Market Vectors Gold Miners)
GVZ vs. GLD (snapshot courtesy of Marketwatch)