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Chart in Focus: Where Is GLD Headed?

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GLD ETF

Gold is the most crucial of the four precious metals, as it drives the prices of the remaining three metals. The directional move in gold is mirrored by the SPDR Gold Trust ETF (GLD). This ETF closely tracks the price of gold and is the second-largest exchange-traded fund in the world

GLD was trading at $124.10 on Wednesday, January 3, 2018. GLD snapped its longest winning streak as it rose for 11 straight days before entering negative territory on the day. The increase in its price is due to gold’s increase, which is provoked by geopolitical unrest.

Inflation pickup possible?

GLD’s volatility is 10.3%, which is much closer to gold’s volatility. GLD’s RSI level has surged to 96.9, which suggests a possible downward revision in its price. It is also trading at a reasonable premium to its 100-day moving average.

In addition to the ongoing North Korean and Iran tensions, the optimism over inflation (TIPS) could also be helping gold prices. Gold is a common hedge against inflation. The increasing price of oil and other commodities like copper contribute to optimism over the inflation numbers. The iShares Silver Trust ETF (SLV) has increased 1.1% over the past one-month period.

The miners that tumbled on January 3 due to the shaky performance of precious metals are Yamana Gold (AUY), Kinross Gold (KGC), Coeur Mining (CDE), and Pan American Silver (PAAS). These miners fell 2.4%, 0.45%, 5.8%, and 2.3%, respectively.

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