Updated View on Gold

As the stock market inches closer to an all-time high the once popular yellow metal, Gold, has fallen off the radar of many investors. The long-term believers of inflation and higher interest rates use Gold as a hedge against any future shocks. But the short-term traders may have given up on the metal as volatility has fallen.

The chart below shows the SPDR Gold ETF ($GLD) over the last year and as you can see in the last couple of months the ETF has been consolidating. The two white lines form a symmetrical triangle pattern that suggests the ETF will breakout in one direction and start a new trend in that direction.

The red and blue lines are the 50-day and 200-day moving averages, respectively. With both falling between the two white trend lines it is a true display of how important the next breakout or breakdown will be for GLD.

We continue to hold GLD for clients and will watch closely the developments over the next couple of weeks. Our educated guess is that GLD will break to the upside and start a new leg higher that will last a few months.