Every trader should watch gold extremely closely. Gold has signaled inflation better than any indicator in the world for the past ten years. When gold trades higher it tells traders that the stock markets are being inflated by a major institution or perhaps even a central bank. The opposite is true when gold declines as it will indicate that the stock market is deflating. Gold and the stock market are synonymous with each other. The only difference is that gold will usually lead the stock market and that is why traders need to pay attention to it. Even intra-day traders can see how gold bounced off the morning low and the major stock indexes followed. It is very difficult to see the stock market rally without gold at this time.
This morning, the popular SPDR Gold Trust (NYSEARCA:GLD) is trading lower by $1.89 to $169.66 a share. The GLD will have short term intra-day resistance around the $170.50 area if it can continue to bounce higher. Should the GLD decline there will be intra-day support around the $168.50 level.
Many leading gold mining stocks will trade in tandem with the gold price. Some stocks that will follow the action in gold closely include the Market Vectors Gold Miners ETF (NYSEARCA:GDX), Yamana Gold Inc (NYSE:AUY), and Gold Fields Limited (NYSE:GFI).