While writing about the attractive price of Pan American Silver (PAAS) and the seemingly imminent breakoout for silver (SLV), I neglected to note that SPDR Gold Shares (GLD) has already broken out from its extended downtrend.
This move is of course inspired by Ben Bernanke’s Jackson Hole speech. At the same time the market anticipates more easy money, it expects the Federal Reserve to succeed in lowering long-term interest rates even further. For example, iShares Barclays 20+ Year Treasury Bond (TLT) soared 1.4% to break out above the 50-day moving average (DMA) resistance that I thought would cap recent gains. I clearly sold my TLT calls prematurely!
Source for charts: FreeStockCharts.com
It never ceases to amaze me that gold can rise at the same time interest rates go down. I can only assume that the buyers in different camps are thinking on different time frames.
Be careful out there!
Full disclosure: long GLD