The symbol of the popular gold ETF is (GLD) . The spot price of gold bullion has surged higher the past year and the best the media can do is to say that this is a six-year high.
Stories about gold talk about a "flight to safety" or the jiggles of the U.S. dollar, trade tensions or international hand-wringing. However, discussion about supply and demand and mine production and quoting anyone of real importance are missing. To be fair, since electronic trading has replaced the price discovery of the physical trading floor reporters rarely get any hard news in an arena where buyers and sellers do their best to stay under the radar. This leaves technical analysis as the go-to method of forecasting prices.
Let's check out the charts of GLD today. In the daily Japanese candlestick chart of GLD, below, we can see an accelerating uptrend from last August. Prices are above the rising 50-day simple moving average line and the rising 200-day line. Trading volume has increased since May and tells us the price strength has attracted more buyers and participants.
The On-Balance-Volume (OBV) line shows a rise the past year and that suggests that buyers of GLD have become more aggressive with heaver turnover on days when the price has closed higher. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since early June and has turned up to a fresh go long signal.
The daily chart below shows a number of price gaps, both up and down. Because bullion trading is really a 24-hour activity many of these gaps are because this instrument only trades from 9:30 to 4:00 so there can be adjustments on the opening and these gaps are not saying something about supply and demand. Wednesday's candle pattern shows a potential reversal pattern on this time frame. Confirmation is needed and candles to not give you price targets.
In the weekly candlestick chart of GLD, below, we can see a low at the end of 2016 but a sustained uptrend did not get under way until late in 2018. Prices are above the rising 40-week moving average line.
The weekly OBV line is bullish and so it the MACD oscillator.
In this first Point and Figure chart of GLD, below, we can see a potential upside price target of $166.
In this second Point and Figure chart of GLD, below, we used weekly close-only data for a longer-term view. Here we can see a possible longer-term price target of $180.
Bottom-line strategy: Our longer-term Point and Figure chart of GLD, above, shows a base pattern going back to 2013. A six-year base can support a major move to the upside. Readers of Real Money and friends who know what I do for a living have remained silent about gold. I feel safe on the subway with my jewelry and the one coin dealer in my sleepy town in New Jersey rarely has customers. Anecdotal stuff I admit but it tells me that the rally in gold probably has a long way to go.