Will SPDR Gold recover?

gld New York, May 16th (TradersHuddle.com) - Shares of SPDR Gold Trust (NYSE:GLD) closed the trading session at $149.74 below calculated support at $153.60. The stock broke down technically, raising concerns as the move might trigger additional selling.

SPDR Gold Trust (NYSE:GLD) is an investment trust. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion. The Trust holds gold, and issues SPDR Gold Shares in Baskets, in exchange for deposits of gold and distributes gold in connection with redemptions of Baskets. The sponsor of the Trust is World Gold Trust Services, LLC. BNY Mellon Asset Servicing, a division of The Bank of New York Mellon is the trustee of the Trust. HSBC Bank USA, N.A. serves as the custodian of the its gold.

SPDR Gold's stock was trading in a well defined range with support at $153.60 and resistance at $171.23; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.

From a technical perspective, it can be expected that previous support becomes resistance, as the new range gets defined. However, $153.60 will remain in focus as SPDR Gold's price action places the stock near the broken support. Traders will be waiting to see if it can bounce back and return to its previous range.

Traders wanting to establish a short position in SPDR Gold can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $153.60. However, if traders want to build a long position, the best entry point to do so is when the price action takes the stock back to calculated support.

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