Entering text into the input field will update the search result below

GLD Hits Lows: Are You Surprised?

Income Generator profile picture
Income Generator


  • GLD is trading at new lows for the year (hitting our forecasts to the tick).
  • Is this "deja vu all over again" or is something more widespread at work?
  • We have consistently warned investors to stay away from GLD.
  • A confluence of bearish macro factors shows that traders should not be surprised at the declines we now see in GLD.
  • Do not listen to the pundits telling you "the lows are in."

And... here we go again. The SPDR Gold Trust ETF (NYSEARCA:GLD) is trading at new lows for the year, and there appears to be no end in sight. Weakness has been brought on by broad strength in the U.S. dollar, the prospect of rising interest rates at the Federal Reserve, and diminishing global demand levels for physical metals. In a recent article on GLD, we told precious metals investors that it is not the time to be building exposure in assets tied to the value of precious metals. Those forecasts look to have played out with a high level of accuracy. But the latest developments have only served to strengthen the bearish outlook, and we will maintain a negative stance on GLD as we move into the end of the summer trading period.

If you are currently long GLD, the punishment continues. The commonly-traded precious metals instrument has lost -7.38% on a YTD basis. Since the middle of April, markets have traded straight down with nothing that even resembles an upside corrective retracement. This activity has fallen in line with our prior analysis, which made the bearish forecast we are seeing unfold now:

Pulling out to the weekly chart, we can see several factors which should flash warning signals for those holding established long positions in GLD. On three different occasions, Gold Bulls have failed in their attempts to scale the 130-level. This is significant because 130 marks the 38.2% Fibonacci retracement of the massive decline from 185 (making it the dominant move in defining trader sentiment). Readings in the Commodity Channel Index also remain bearish - and the failure to maintain historical demand levels at 118 suggests a deeper fall back toward 114.60. "

Source: Author

We are now trading at 114.52 at time of writing. There are many investors

This article was written by

Income Generator profile picture
The Income Machine is driven by market analysis from strategies covering more than two decades of trading experience successfully navigating through a broad variety of asset classes. Army veteran. Trading room is now open, offering complete access to the full set of investment portfolios: Try the Free Two-Week Trial available for income investors looking to lock-in the introductory rate!

Analyst’s Disclosure: I am/we are long SPY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.