Is the "re-risk" trade back on for gold? Last week everyone was "de-risking," remember? The pattern carved out in the SPDR Gold Shares (NYSE: GLD) since the May 12 all-time high at 122.24 argues that major "de-risking" (otherwise known as profit-taking) emerged into the May 21 low at 114.01 (-7%).

All of the action off the 5/21 low into yesterday's high at 119.08 has the right look of a new upleg in the GLD that should revisit the May high in the hours/days directly ahead. It is interesting to note that gold prices (the GLD) have climbed over 4% during a 3-day period when the dollar has declined versus the euro, which suggests that gold prices now are showing us they can rally in the absence of a flight to safety into dollars and Treasury bonds.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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Comments

John Hoffmann
29 May 10, 08:57

Dollar & Gold up together

Typically gold prices rise when the dollar falls because gold is priced in dollars, but for the duration of the Europe crisis, gold and the dollar moved up together as both looked safer than European debt and Euro dollar. If the US dollar should give back its gains as the world fears subside, the great question is will the price of gold levitate on the weak dollar, or will we see hot money flow out of gold and back into riskier assets.

-John

http://capitalmarketmaps.com/etf

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