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Gold Prices And SPDR Gold Trust ETF (NYSEARCA: GLD) Are Trading Right On Long-Term Support – Tim Bellamy (11/24/2020)

Gold futures have been on track for another drop that is razor-sharp Tuesday morning and are threatening to drag the precious metal’s price below an amount seen as key support, causing a lot of traders to sell in panic right now over the very possibility. The selling is reflected in the SPDR Gold Trust ETF (NYSEARCA: GLD) today.

Progress toward treatments for COVID-19 has paired down the need for the metal for some as it acted as a safe-haven for investors early this year as they rushed into bullion after the U.S. dollar rose amid economic uncertainties produced by the pandemic.

Further clarification in the U.S. government scene has also come this morning after President Trump late Monday stated his aides would cooperate with President-elect Joe Biden’s transition to the White House. This can also be easing investors’ concerns about a drawn-out fight over the Nov. 3 election.

Today’s decline follows the drop on Monday as gold and silver took a hit after fresh reports from drugmaker AstraZeneca, who said a late-stage research unearthed that the vaccine it’s developing with all the University of Oxford had an as much as 90% efficacy rate. That news followed vaccine that is similarly positive from Pfizer and its partner BioNTech, as well as from drugmaker Moderna early in the day this thirty days.

SPDR Gold Trust (NYSEARCA: GLD) – the world’s gold ETF that is largest with an industry cap of US$ 71.5 billion – saw an accelerated speed of redemption in recent months. This may reflect weaker interest in paper gold. The number of GLD shares outstanding has dropped from a peak that is present of million on October 14th to 415.6 million on November 23rd, marking a 5% drop. A reduction in the genuine number of ETF stocks suggests that redemptions have actually outpaced subscriptions, and also this trend shows no sign of reversing any time in the future.

Ironically this should also be seen as bullish for gold and the metals ETF’s as people are mass dumping them while they still are around key long-term support levels of their 250-day moving averages as you can see from the chart. In fact GLD is trading right above its 50% retracement point of the March low and summer peak, which is typically a key support level.

-Tim