Negative Technicals for Gold

As our proxy for gold, let's have a look at the big picture of the SPDR Gold Shares ETF (NYSE: GLD).  As we enter the final hour of the week, let's notice that the GLD appears to have held lows in the 128.80 area against its July-October up trendline, which preserves its near term uptrend. That said, however, the "Island (Cluster) Top" that was put in during the Oct 14-Oct 19 timeframe remains valid and represents a very powerful negative technical influence on the GLD.

Unless or until the gap area between 1.3150 and 1.3280 is filled, the near-term technical health of the GLD must be questioned. Furthermore, inability of the GLD to close the down-gap before the price structure breaks the July-Oct up trendline at 128.80/70 could have a devastating impact on the heretofore bullish trend- and will project GLD prices into the 123.00-121.00 target zone.

Much might depend on the outcome of the G-20 meeting, which likley will have a meaningful impact on the direction and the value of the US Dollar. If the Dollar responds positively to the G-20 meeting, then the GLD likely will break the July-Oct. trendline.