GLD decline is exaggerated; seeking a short-term tradable bounce, not a long position.

You have the GLD fund as the first deal of the day in this paragraph. What is your thesis on GLD at the moment? The GLD fund experienced a rather sharp decline. This clearly has a big connection to the US dollar.

With the US dollar rising strongly, which is very much linked to the bond market of course, isn't that right? So, people are actually switching to dollars. This in turn has a significant negative impact on gold.

I think this decline is exaggerated at this stage. It's a very sharp decline from the 430 level down to the 380 level. As I said, I think the dollar's rise is also overdone.

I am looking for a tradable bounce, nothing more, and I want to emphasize that I am not here to do a long buy in gold. I am looking for what we traders call a sudden, strong upward bounce, and I believe this will be tradable in the gold market.

To do this and to determine the risks, I will use the October 30th options. Again, the October 30th options, i.e., the expiry date of October 30th. I will buy call options at 380.

I will buy 380 options and sell the corresponding 385 options. That difference, which is a $5 bid option spread, was executed at a discount of $1.40.

Once again, just a short-term optimistic view of gold, in search of that typical upward breakout. KG, looking at the technical aspects of the "GLD" fund, do you see a possibility of a breakout soon?

Well, I think if we look at the daily chart for one year, you might have this setup for trading in case we actually drop to the $360 level. And if you look at the graph, here's why.

We clearly saw gold, or "GLD", move upwards at this time last year. We saw a good breakout, but we've been recording fewer highs since then. We now had a major and influential downtrend line from the peaks, which was already broken after we had done some consolidation between July and early August.

We retested the 200-day moving average, but we failed at that too. We failed at the 200-day, 20-day, and 50-day levels, and we've kind of returned to this trading range of approximately $360 to $384.

But because of the consolidation we saw earlier in July, it could be argued that some buyers might be ready to enter around those levels. They may not want to enter at these current levels.

The Relative Strength Index (RSI) is recording fewer highs and fewer lows. The MACD indicator is trying to stabilize. I think this would be one of your first signs that a strong, sudden uptrend and a retest of some of those key moving averages might be happening here.

But Marley, I think a stronger support zone might provide a better entry point for many institutional investors compared to the current levels we have now in the interest rate environment.

Good. So, we are only looking for a short-term uptrend here, as Don explained. He is not taking a long position in gold, but is only looking for an upward move in the short term.

KG, as you look at the long-term chart for "GLD", does the trend still hold? I mean, the trend is still in place. I mean, you're looking at higher peaks, and mostly, higher troughs when you look at a three-year weekly chart.

But you look at this trading setup, and you can say that we are probably at this third point of the wave. If you look at the trend line from the bottom levels and move it a little, you will see that the 355 level, and again 360, is a strong support area before we move upwards.

So, if you are someone who follows Elliott Wave Theory, Dow Theory, or is a technical trader, it most likely looks like we are in the midst of the third wave here. We hit that trend line, then bounce right back up, trying to reclaim the 20-week moving average.

This is the time when you can become more optimistic about this stock. The Relative Strength Index (RSI) and the MACD indicator are still in a bearish formation on the weekly chart.

Well, the GLD fund has declined in the trading session. We are down about 1.7% as we also see gold down about 1.5 percent in the session.