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New Intermediate-Term Bull Phase for Gold?


We discussed Friday that based on my intermediate term work the SPDR Gold Shares (GLD) ended a significant correction off of its Feb 28 high at 174.00 at the May 30 low of 148.53, which coincided with my expectations for a 5.5 month cycle low.

The rally from the 148.53 low to the June 6 high at 159.30 exhibited very bullish form, which suggests strongly that a new intermediate-term bull phase has commenced.  The pullback from the June 6 high into Friday's low at 151.21 satisfied the criteria of a deep, successful retest of the 5/30 low, which if accurate, means that the GLD has put in a potential Double Bottom low in the aftermath of its intermediate term correction into the 151.00-148.50 support zone.

We put out a buy trade set-up on the GLD on Friday looking for the resumption of strength that propels the GLD to revisit and hurdle the 158-159 resistance plateau, on the way to 165-166 thereafter.  So far, so good, with the GLD popping to the upside today.

Meanwhile, the USD is also climbing today, suggesting that for some reason the gold and the euro markets are diverging.  My suspicion is that increasingly a disillusioned investor class will "hide" in the perceived safety of gold rather than in U.S. Treasuries and German Bunds (puny yields offer insufficient risk- premium).

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