PHYS and PSLV – 7 Apr

 

Gold is consolidating at all time highs and PHYS is consolidating at a somewhat lower level than its all time high. The high set in early March was during a time when the premium to NAV was higher. Currently the premium is under 2%. Consequently, it is a great time to pick up some real shares in a real gold bullion fund. RSI is tracking dead neutral at 50, and stochastic is basically going sideways near over-sold territory. Volatility is very low and is illustrated by the narrowing of the Bollinger bands. Whenever the bands contract, a break to higher volatility and expansion of the bands is suggested. I expect the fundamentals in gold to propel this chart higher very soon towards resistance at 13.03-13.13. Support remains at the 12.42 area.

 

Some of the ultra high premium has come out of PSLV and it also has been consolidating somewhat lower than the all time high. But, it is a lot closer to the high than PHYS. As with PHYS, I expect the all time high of 18.20 to be challenged shortly, maybe even tomorrow. RSI is approaching over-bought territory near 70. Stochastic has embedded (3 closes above 80) and is suggesting strength is now inherent with increasing momentum. The Elder impulse chart painting a green bar and indicates increasing bullish momentum and suggests entry for long trades. This consolidation has brought the premium to NAV down to the 16% level after better than 20% premiums were being paid at the top of 18.20. I see PSLV breaking higher very soon.

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