Gold and precious metals in general have been a darling of the market so far this year, and I’m sure by writing this post, I’ll get some angry tweets, and messages as a result.
But hey, I am here to read and follow the charts, not make people feel good about their existing long positions.
SPDR Gold Trust (GLD) of late has seen a fairly heavy sell-off form the $125 area with little bounce on the daily chart. Today is no different – down over 2% in all.
However, today’s price action is the least of the bull’s worries as there is a massive topping pattern forming on GLD that is infamously termed a broadening top or megaphone pattern.
So here’s the deal, if GLD can hold the $115 level, all is well. But break below it, and that is where things get ugly and nasty – with a potential target of $105.