Gold Rally Stopped Dead In Its Tracks

Includes: GLD, IAU
by: Bespoke Investment Group

The chart below shows the intraday trading of the front-month future in gold over the last three weeks. On Friday, April 12, the price of gold declined 4% and closed in official bear market territory. The following Monday, the bottom fell out of the gold price as it declined another 9.4%, taking the commodity to its most oversold levels ever.

Since that meltdown on April 15, gold has been quietly rebounding, and through yesterday's close, it was up nearly 12%. However, over the last couple of days gold has been running into resistance at levels that corresponded to the opening price on April 15. Today, the resistance seems to have prevailed as gold is trading down 2% for its largest one-day decline since April 15.