SPDR Gold Shares (GLD) has been in a bear market since reaching its peak in January, but recent technical indicators suggest that a significant counter-trend rally could be on the horizon. GLD has found stability above previous lows near $360, which may serve as a base for recovery.
The initial resistance level is identified in the $405-$410 range, marked by the weekly cloud model and the 200-day moving average. A new daily MACD buy signal indicates improved short-term momentum, suggesting a potential rebound of over 7% towards this resistance. The recent price action indicates a false breakdown below support, hinting at a shakeout that could lead to upward movement.
Additionally, the weekly stochastic oscillator is set to rise from oversold conditions, providing early signs of a possible intermediate-term low for GLD, which aligns with trends in gold futures. The ratio of GLD to the SPDR S&P 500 ETF Trust (SPY) is also showing signs of improvement, indicating that gold may outperform U.S. equities in a risk-off environment.
Katie Stockton, CMT, founder of Fairlead Strategies, provides this analysis, emphasizing the potential for gold to regain favor among investors