SPDR Gold Shares signals potential rebound as momentum improves
After sliding from its January peak, SPDR Gold Shares remains in a bear market but is showing technical signs of stabilization. A recovery toward the $405-$410 resistance zone would imply more than 7% upside, even as the broader downtrend still frames the trade.
Highlights
- SPDR Gold Shares (GLD) stabilized above $360 support, with improved short-term momentum and initial resistance at $405-$410, per Fairlead Strategies analysis.
- A new daily MACD buy signal and false breakdown below support point to a potential intermediate-term low as the weekly stochastic oscillator is set to turn higher.
- The GLD/SPY ratio's rebound from support and improved weekly stochastic oscillator indicate rising gold outperformance potential versus U.S. equities amid a defensive market backdrop.
Technical setup points to near-term upside
As reported by CNBC, Fairlead Strategies founding partner Katie Stockton says SPDR Gold Shares, or GLD, has stabilized above support near $360, an area defined by previous lows that may now serve as a base for a rebound.The fund's initial resistance stands in the $405-$410 zone, marked by the weekly cloud model and its 200-day moving average. Short-term momentum has improved after a new daily MACD buy signal, which Stockton views as a potential catalyst for a move back toward resistance.
The indicator shift follows a brief break below support that failed to hold, suggesting a false breakdown and shakeout. If upside follow-through continues, the weekly stochastic oscillator is poised to turn higher from oversold territory, offering early evidence that GLD may be carving out an intermediate-term low in line with price action in gold futures.
Relative strength improves against U.S. equities
The ratio of GLD to the SPDR S&P 500 ETF Trust, or SPY, is also turning higher from support, with its weekly stochastic oscillator rebounding from oversold levels. That relative momentum suggests gold may begin to outperform U.S. equities in a more defensive market backdrop.While the technical picture still sits within a prevailing bear-market trend, the improving signals indicate that gold is regaining some traction. For investors, that raises the prospect of a counter-trend rally and a stronger risk-off role for the metal if market volatility persists.
In a previous article, we explained how the S&P 500 rally faces an earnings and interest-rate test near 8,000.
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