Analysis: GOLD GLD

Looks like our gold stock in the Bullpen isn't quite panning out.
 
American Barrick ( GOLD) is one of the better gold miners out there, but the stock has been faltering badly since the spring. This stock remains under pressure and has fallen some 30%, while gold has not fallen nearly as much.
 
As of now, we would be unlikely to add this miner to the portfolio, so we are kicking it out of the bullpen, but adding the gold exchange-traded fund, the SPDR Gold Trust ( GLD) , onto our watch list.
 
 
GLD has certainly been under some pressure over the past few weeks and that is likely due to the strength in the U.S. dollar and the reserve currency status. In addition, we believe Russia is also selling some of their gold into the market, as well, creating more supply. Over the long term, gold is certainly a good hedge against inflation, war and disasters. It's also a useful metal to hold. The Relative Strength Index, however, is poor, while the ultimate oscillator is bending lower.
 
This tells us gold may be faltering soon, but over the longer term the metal is worth keeping an eye on. We'll put GLD in the bullpen and look to bring it up soon.
 
 
 

At the time of publication, AAP had no position in any security mentioned.