Gold ETFs May Fall Through: Weekly Precious Metals ETF Report
Gold ETFs hovered around 50 Day Moving Averages this week and may fall through soon
Precious metals ETFs may plunge heavily soon, as gold ETFs and silver ETFs are starting to show further signs of bearish sentiment. The gold spot price declined .45% to close out at $1697.50 per ounce for the week, while the SPDR Gold Trust ETF (NYSEARCA:GLD) lost .63% for the week and the iShares Gold Trust Fund (NYSEARCA:IAU) lost .65% for the week.
From a weekly perspective, both the gold spot price and gold ETFs appear to be hovering just above their respective 50 Day Moving Averages, which has recently provided a firm level of support. With declining RSI and MACD readings however, gold prices might see a break in support levels and thus completely dump. Typically if a strong level of support (like the 50 Day Moving Average) is broken, prices fall significantly.
A chart of the SPDR Gold Trust ETF (NYSEARCA:GLD) below illustrates the possible bearish situation:
chart courtesy of stockcharts.com
Looking at the chart above, it is clear that NYSEARCA:GLD is just touching its 50 Day Moving Average and has leveled off that current support level. However, with a negative MACD reading of -.490 and an RSI just below 50, I would suggest that NYSEARCA:GLD is on the verge of another decline. The 50 Day Moving Average will be a tough barrier to break however, so NYSEARCA:GLD could continue to see flat levels.
Silver ETFs paint the same picture, as the iShares Silver Trust ETF (NYSEARCA:SLV) declined 2.68% for the week to close at $31.17 per ounce. A chart of NYSEARCA:SLV looks almost identical to the chart of NYSEARCA:GLD above, suggesting that precious metals are possibly in for a major dump.
Weekly Gold ETF Update:
Gold Spot Price: $1697.50/oz, -.45%
SPDR Gold Trust ETF (NYSEARCA:GLD): -.63%, This ETF reflects the current price and trends of Gold Bullion and so offers exposure to the gold market within a brokerage account. The gold spot price for NYSEARCA:GLD is determined by the 24 hour global over-the-counter (OTC) gold market. The SPDR Gold Trust ETF (NYSEARCA:GLD) is the world’s largest gold ETF and second largest ETF in existence.
iShares Gold Trust ETF (NYSEARCA:IAU): -.11%, This ETF reflects the current price and trends of Gold Bullion and so offers exposure to the gold market within a brokerage account. The iShares Gold Trust ETF (NYSEARCA:IAU) is backed by gold held in trusts located in London, Toronto, and New York. The gold spot price for the iShares Gold Trust ETF (NYSEARCA:IAU) is set by the London PM Fix Price for spot gold as determined by the London Bullion Market Association.
Silver ETF Update:
Silver Spot Price: $32.37/oz, -.92%
iShares Silver Trust ETF (NYSEARCA:SLV): -1.14%, This ETF reflects the current price of silver and trends of Silver Bullion and so offers exposure to the silver market within a brokerage account. The iShares Silver Trust ETF (NYSEARCA:SLV) is backed by real silver and the silver price is set by the London PM Fix Price for silver as determined by the London Bullion Market Association.
ProShares Ultra Silver ETF (NYSEARCA:AGQ): -2.39%, This ETF reflects the 2X daily return of the current price of Silver Bullion. The ETF is priced in US dollars based on the afternoon closing price of Silver in London. The ProShares Ultra Silver ETF thus offers double exposure to the silver market within a brokerage account.
Bottom Line: Gold ETFs and Silver ETFs appear to be on the edge of a possible decline, with major indicators pointing towards bearish sentiment. If the 50 Day Moving Average is broken with both gold and silver ETFs, then large declines are likely eminent.
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