For all of the Gold Bugs out there, we are quickly approaching what may be a good buying opportunity for the SPDR Gold Trust (GLD). As I have said many times before, I am not a believer in the gold trade. I did not expect to see a significant rise in inflation; and I do not see gold as a great store of wealth, or as an alternative currency. It would certainly seem that gold investors and traders, too, have come to realize that rampant inflation is not on the horizon, and that it will not be an issue at any time in the near future. Thus, the major stampede for the door.
At one point in time, gold served to keep the U.S. Dollar in-check, and it helped to keep our illustrious leaders from spending this great country’s way to the “Poor House” — but, those days are long gone. I certainly believe that gold makes for great looking jewelry, and that, as a practical application, it makes for great replacement teeth (i.e. crowns). It also works extremely well (given its anti-corrosion properties) as contact switches for automobile air bag deployment systems. Other than that, however — I’m not a buyer.
For those who are buyers, and for those who believe that gold is a great store of wealth, the $105.00 price level is the level to watch. If GLD’s price reaches that mark and then stabilizes, it may be worth picking-up a few shares with a “dollar cost” averaging strategy.
At present, GLD is situated around a key support area at $115.00 per share; but, I believe it will drop further — especially given the recent news coming out of the Fed regarding ending the bond purchase program, also known as QE10 (only kidding — sorta :)).
Notes: Charting data provided courtesy of StockCharts.com.
Disclosure: I do not own any shares of GLD, and I have no intentions of initiating a position in GLD at any time within the next three trading sessions (i.e. prior to (7/11/2013).
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