Market Timing Gold and the GLD ETF

8-16-2010: Here is the catch on the GLD share and gold market timing breakout this morning. This COULD BE a false breakout TRAP! 

Follow the simple story. The close on Friday 8-13-2010 was 118.74.

Gold's move this morning was is as of 9:13 am EDT only 0.05 (5 cents!) of the 9.90 total move up in US dollars. 

That is 0.505% of the move due to GOLD BUYING per Kitco.com.

The move in the GLD pre-market trade is to 119.77.  That is from 118.74, so the move DUE TO GOLD buying alone would only be to 119.34 which is only 0.21 above the breakout point of 119.13.

So what happens if the dollar reverses and moves up today?  The GLD price breakout vanishes.

CONCLUSION:  The GLD breakout this morning is almost entirely due to US dollar weakness.  It could vanish in a heartbeat based on a dollar reversal. 

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