GLD: Thou Shalt Not Bounce (Yet)

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GLD.  That gold and the dollar are inversely correlated has been known and is supported by economic theory (bleh…ghey?).  Below is a bar chart of GLD, with the $USD in black.  I drew a purple line at the bottom end of the volume pole, falling through which could be achieved readily.  The blue line is an interesting trend on the dollar that I chanced upon.

If that blue support line holds on the dollar, just a smidgen above 80, then we should see the dollar bounce, halt any gold strength that may be forming and give bears an excuse to push gold lower.  How far could gold/GLD fall?  Check out the next chart, where I drew some fib (liar) lines from the 2008 lows.

Right now, GLD is a bit in no-man’s land in the fib chart and the 50% line is at $125.92, making $1250 a nice round target for gold bears to aim for.  That is where I think we are headed on gold and it is also at the top end of a volume hole, which tells me that we could swing below that number, but not for very long.

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