Gold Prices and GLD Hammered
The combination of the continued fallout from Amaranth, the debacle in oil prices, and the exodus from commodities to bonds or equities continues to hammer gold prices and the GLD. However, today's action in particular has caused serious damage to the intermediate term chart structure of GLD-- because price has violated its Mar.-Oct. support line at 57.00, which has triggered even more long liquidation off of the last Friday's recovery rally peak at 60.27. Thus far, the GLD has plunged to an intraday low at 55.55, or just 50 cts from a full-fledged retest of the prior significant pivot low at 55.05 (6/14). If the 6/14 low is violated, then the GLD wil project to a next optimal downside target window of 50.00 A $500 target basis spot Gold)- a level not seen since Nov-Dec. 2005. Should 55.05 contain the current onslaught, then a rally that sustains above 57.00 is needed to argue that from a technical perspective, a significant low has been established. MJP 10/04/06 1:10 PM ET (56.07)
For more of Mike Paulenoff, sign up for a Free 15-Day Trial to his ETF Trading Diary.