Ho hum…gold makes another all time high. Look at the RSI. Since when does the RSI study get over-bought for a month and counting? Since now I guess. The usefulness of TA is really being diminished and as Sinclair says “trade at your own peril”, the risk in this market is getting caught out of it during a big move higher. By any measure gold is overbought. Volume was lower on the day slightly and may be the first sign that buyers are drying up at these prices.
Support is coming from the previous swing high at 1817 and resistance is the all time high at 1905. Further support comes from the Fibonacci 38.2 retrace, 18 day moving average, and the previous swing low, all around 1725. This is the level that must hold to maintain the current uptrend. I believe a hundred dollar move lower at any point, perhaps to the boundary of the original trend channel is highly possible.
PHYS has developed some premium lately and has rimmed that premium over the last 2 days to 3.74%. If you are buying and holding GLD, stop. This is the fund that you need to own. Its gold is 100% bullion, allocated and inventoried at the Royal Canadian Mint. GLD has some allocated bullion and lots of “paper” gold that amounts to IOUs. Resistance is the all time high at 16.86, with support at today’s low near 16.40. Stronger support lies at the previous swing high of 15.62. Volume dropped for the 2nd day in a row on declining price, nothing to be alarmed with there. You don’t want to see declining volume on increasing price or increasing volume on declining price. All in all, I smell a correction in the air with a move to 16.