Gold Price Reverses Course On Geopolitical Tensions

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Gold opened weak as inflation expectations eased, but recovered on reports concerning Ukraine. The chart below shows the Gold SPDR (GLD) moving below 124.5 in the morning and then recovering with a move back to the 126 area. If we ignore the spike below 125, then nothing has really changed on this chart. GLD broke out of the big wedge in mid June and this breakout held with the bounce off 123 in early August. The ETF broke out of the little wedge and the breakout line turns first support. At this point, I think a close below 124 would negate the little wedge breakout and increase the odds of a bigger break down. The red line shows the Chandelier Exit, which acts a trailing stop-loss. Traders going long on the mid June breakout and using this indicator to set stops would have been stopped out in mid July. Traders going long on the early August breakout would still be in with a stop-loss just below 124.21, which is the Chandelier Exit value. You can read more about this indicator in our Stockchart’s ChartSchool.




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