Selling Pressure In GLD?

London (April 9)  Our philosophical view is that real gold is real money. However, in today's financial system it is traded primarily as a paper derivative. One day, we believe that gold will be set free from its paper chains and leap in value. We can't predict the timing of the monetary reset we believe is inevitable; therefore, our strategy is to remain long precious metals in a nimble way, looking for clues that the market may provide for near-term price direction. We write weekly columns on the SPRD Gold Trust (NYSEARCA:GLD) and the iShares Silver Trust (NYSEARCA:SLV) which outline our week-ahead views and positioning.

The price of GLD is dependent upon the value of gold in the futures market. The futures market trades more hours than GLD, and at much greater dollar volumes. As a result, we view technical analysis of GLD to be inferior to technical analysis of the COMEX futures market.

Summary View

We just finished an eventful week in the gold market, and late Thursday and early Friday morning were particularly memorable. The U.S. missile strike on Syria brought out many gold bulls, and the price shot above its 200 DMA. Then on Friday morning, the jobs report came in with worse news than expected. This caused another upward spike in the price of gold. Nevertheless, gold finished the day with strong selling pressure. We view the rejection of the 200 DMA after the avalanche of normally bullish news to be a cautionary flag. Without further geopolitical headlines, we anticipate the selling pressure to continue into next week. A tweet from U.S. president Donald Trump over the weekend could of course change everything. We enter next week flat on GLD, with an expectation of further downside.

Source: SeekingAlpha