Below we have defined the formidable buying range that GLD has formed ($79.64-83.86). Albeit barely, the GLD is up for 2009 to date, and this compares favorably with most of the major asset classes you can own. As the British Pound gets pounded, the Russian Ruble run over, and the Korean Won wackamoled, it’s no surprise that asset allocators are clamoring for the safety valves associated with the shiny yellow rocks. Some still view gold as a currency, after all.
In our Asset Allocation Model, we currently have a 6% position in Gold – look for me to trim that position into strength from here, then buy it back lower. As the SP500 tests people’s nerves under the 800 line and the VIX makes another run for the 55 level, GLD should continue to flash a positive divergence.
Keith R. McCullough
CEO & Chief Investment Officer