Playing the Setup in SPDR Gold

Published on Tuesday, 03 July 2012 08:42 Written by TradersHuddle Wire

New York, July 3rd (TradersHuddle.com) - SPDR Gold Trust (NYSE:GLD) closed the the trading session at $155.09, near its 50 day and 200 day moving averages currently set at $155.49 and $161.77 respectively. SPDR Gold's price action places the stock below these important levels, which makes it difficult to be bought, as it will certainly face resistance as it approaches these important moving averages.

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.

The latest price action range, defined by a peaks and troughs algorithm, placed calculated support at $150.15 and resistance at $159.20. Traders should monitor these levels, as they provide insight into the latest price dynamics in SPDR Gold.

If traders want to establish a position on SPDR Gold, given the heavy resistance expected near the 50 and 200 day moving averages, a trade might be evident as the stock manages to break these moving averages. However, until the break materializes buying the stock is nothing different than flipping a coin.