Demand for gold assets have surged this year. For instance, ETF flows into gold have expanded at their fastest pace since 2009. Physically backed gold ETF holdings are still one-third below the December 2012 peak, which suggest that prices can hold at about $1,200 per ounce.
Still, investors should be mindful of the technical outlook for gold.
“Over the past 6-months, Gold could be creating a rising wedge pattern. This pattern two-thirds of the time, suggests lower prices are ahead,” says Chris Kimble of Kimble Charting Solutions. “If history is to come true per this pattern, support needs to be taken out at (1) above. If support does give way, selling pressure could increase. The pattern in the US$ looks almost the polar opposite (bullish falling wedge resistance test in play).”
For more information on the Gold ETFs, visit our Gold category.
SPDR Gold Shares
Tom Lydon’s clients own shares of GLD.