GLD – Big Move in Gold Today

After 6 months of declining, we’re starting to see some positive commentary on the gold front.  The past few days there has been gold bullish news, not just pertaining to technical charts.

• “Goldman Sachs is out with a bullish note on gold. They see three reasons for a rebound starting with a stabilization in emerging market growth and EM currencies. Second, the say a recent liquidation in specs as a one-off cleaning up of speculative positions rather than the start of persistent developed market outflows. Third, they say that a rising interest rate environment isn’t necessarily bad for gold. Technically, gold is a non-starter until it can get above the late-August and September highs.” (ForexLive)
• “Gold fell for the sixth straight month in September, the longest losing streak since 1997, Commerzbank notes. However, “we believe the tide will soon turn for gold and envisage a potential price of $1,300 per troy ounce by year’s end.” (Kitco News)
• “The 3-Year Min/Max Screen shows that “smart money” hedgers moved to another multi-year extreme long position in gold.” (Sentiment Trader)

Short covering likely played a large part in today’s upward move, but resistance lines above the current price still need to be broken for a convincing turn around.  The chart of GLD demonstrates how drastic the past 6 months have been, and where we are today.