The current political uncertainty in the United States and abroad under an environment of continuously low interest rates provides gold as an alternative investment along with crypto currencies reminiscent of the conventional investor adage recommending investors put 10% of portfolio in gold. SPDR® Gold Shares (NYSEArca: GLD) represents the largest physically backed gold exchanged traded fund in the world holding 100% physical gold bullion with a 52 Week High of $GLD is $129.17 vs. low of $107 with a market cap of over $33,400,000,000. However, this bet on future increased instability alone is not a sound idea which is why we look at the technical analysis.
On the 1 year daily chart for $GLD we can see the 20 day Simple Moving Average (SMA) crossover of the 50 SMA which if sustained provides Long Target 1 $125.50 and Target 2 $127 with STOP $120.50. The 3rd target $129 retests the highs of early September 2016 which had a MTTS sell alert at the end of September/Early October from $125 into mid-December 2016 from to $107.
Looking at the monthly chart from 2010 to 2017 the 1st Long term target is $135.50 retesting above long term resistance in 2013, followed by Target 2 $140, and Target 3 $153.50. Target 4 $175 highs retests the long-term high from late 2011 to 2012.
If we can see a real uptick and demand grow for gold worldwide in the near future with continued political uncertainty in the current administration, gold becomes a way to become hedge the continued downside of the dollar and possible slowdown in the US economy demonstrated by Quarter 2 2017 Earning Statement for the majority of stocks in the major US markets (i.e., SPY, Nasdaq, Dow Jones) that outperformed expectations on earnings per share, revenue, and guidance forecasts yet still were unable to live up to expectations of investors leading to a sell-off such as $NVDA, and $ATVI.
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