Gold has been a terrible investment over the past several years, and while bulls expect inflationary pressures to put a bid under the metal, it doesn't appear they're winning.
Looking at GLD as a proxy, we've just violated major support. How major? We've broken the trend line going back to GLD's inception in the mid aughts. This monthly chart shows that we could be set to plummet for quite a while longer, as my oscillators are signaling sell (again, on a monthly time frame). Exacerbating the fall is the lack of meaningful inflation, but that, of course, may change in the coming months and years as growth accelerates and central banks unwind balance sheets.
Short term, I expect a bounce from this $118 level up to the support-turned-resistance trend line. So, I'm actually going long for the bounce, but I'll be looking to switch teams as prices rise and position for another leg lower.
Support is at par, or $100 (or spot gold at about $1,000).
You should research gold a bit more. It performs best when there's deflation, not inflation. Stagflation is OK too.
Also, don't mess around with trading it, get some of the real stuff, potential 1000%+ gain within 3 years.
EchoAlphaBravo
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@I_dont_know_but, Thanks for commenting. Based on what you've said, gold should have moved higher the past few years because inflation has been mostly nonexistent (Well, according to the Feds, anyway...). I think it's more of a flight to safety, although I disagree with the "safety" of the asset. This post simply to point out the technical picture, which is not good regardless of inflation, deflation, or stagflation.
I_dont_know_but
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@EchoAlphaBravo, 1/1/2016 gold was $1040, today it's $1250. Your view of the safety of gold will change, and it won't be reflected in paper gold like GLD either. Physical will be marked to market soon enough.
Also, don't mess around with trading it, get some of the real stuff, potential 1000%+ gain within 3 years.