Gold’s Bear Market Rebound Is Gaining Momentum, Katie Stockton Says

SPDR Gold Shares (GLD) has been in a bear market cycle since peaking in January, but improving momentum suggests that a significant counter-trend rally may be coming. The technical setup supports a rebound within the context of the prevailing downtrend. GLD has stabilized above support defined by previous lows near $360, establishing a potential base from which it can recover. Initial resistance is in the $405–$410 zone, defined by the weekly cloud model and the 200-day moving average (MA). Short-term momentum has improved following a new daily MACD buy signal, providing a catalyst for a rebound toward resistance that is more than 7% higher. The signal followed a brief breakdown below support that failed to confirm, suggesting that a shakeout—a false breakdown—has occurred. With upside follow-through, the weekly stochastic oscillator is poised to turn higher from oversold territory, providing early evidence of an intermediate-term low in GLD, aligned with the price action in gold futures. The ratio of GLD to the SPDR S & P 500 ETF Trust (SPY) is also turning higher from support, with the weekly stochastic oscillator rebounding from oversold territory. Improved momentum behind GLD versus SPY supports outperformance by gold versus U.S. equities for a risk-off takeaway.

Katie Stockton, CMT, is the Founder and Managing Partner of Fairlead Strategies.

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