Gold: Where Is The Support

I've been bullish on gold for quite sometime but I exited my long position the other day when I saw all the world markets fall on heavy volume and Gold didn't rally. I'm still looking to buy gold because I think the dollar is going to continue trending lower and the gold up trend is still intact.

If you look at the above daily chart of GLD, I marked off two areas where I'm going to look to get long gold again. The first area is around 64.00 to 64.50 which is the 50% retracement of the last advance and is also a support zone of prior highs.

The second area of support would be the bottom of the channel which at the moment comes in around the 62.50 area. Notice the high in GLD last week was exactly at the top of this channel. As long as GLD stays above the lower channel line, I consider the short term trend up and I'll be looking to buy.

The last pullback we had in gold was in December and it lasted for about 4 weeks, so I'm going to be patient and allow more time to elapse (a few more weeks) before I build into a heavy position again. If GLD were to test the levels I just mentioned next week (which I feel is too soon), I will buy lightly just to be involved because I really would prefer to see more time spent consolidating before I make a large commitment on the long side.