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Technical Breakdown: When To Buy Gold

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Technical Breakdown: When To Buy Gold

Is now a good time to buy gold if it's at the early stages of a sustainable long-term rally?

The most commonly tracked exchange traded fund for gold, SPDR Gold Trust (ETF) (NYSE: GLD), is up more than 16 percent since the start of 2017 but still nearly flat from a year ago. On Tuesday, the commodity saw its price trade as high as $1,345.50 an ounce after breaching the important $1,300 level on Aug. 28.

The price of gold made at least two attempts to move above the $1,300 level and failed each time, Matt Maley, an equity strategist wrote in a CNBC op-ed. Rallies in April and June were each met with resistance, so a strong push above the $1,300 mark has many investors wondering how sustainable the current run is.

Unfortunately, gold's 12-percent gain since early July does imply it's overbought on a near-term basis, Maley suggested. Also, gold is flirting with two key levels of $1,365, which represents the closing high from 2016 and $1,370 which is 2016's intraday high.

If gold manages to meaningfully break above the $1,370 level, it could prove to be an "even more bullish" sign for gold and investors might want to wait for this to happen before jumping in. Otherwise, investors are cautioned to expect a "bit of a give-back int he days and weeks ahead."

Related Links:

A New Gold ETF For Frugal Investors

The Kobeissi Letter: Gold Is Heading To $1,400 And Here's Why

Posted-In: CNBC Gold Gold ETFTechnicals Commodities Markets Media Trading Ideas Best of Benzinga

 

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