Growing Bullish Psychology for Gold

Gold and the SPDR Gold Trust (NYSE: GLD) act very well today, in sympathy with the upward pressure on the stock indices, as well as because the dollar is considerably weaker.

I cannot help but think that also playing into today's mix is the WSJ article about the Fed reviewing its options if the economy weakens "again." From a gold bug's perspective, I have to think that the prospect of ZERO or NEGATIVE interest rates for an indefinite time period, coupled with THE DESIRE by the world's institutions to "create inflationary expectations" in a grand effort to avert a deflationary spiral, have to be underpinning a growing bullish psychology for gold.

As for the chart action, the GLD popped to the upside this morning, taking out key near-term resistance at 120.20/40, which has triggered upside follow-through off of last Friday's low at 118.96. So far, the minor upside breakout has climbed to 120.87 -- likely on the way to revisit 122-123. Only a break of 118.80 will wreck the current set-up.