maffex

Anticipating a breakout to the upside in gold via IAU

Long
AMEX:IAU   iShares Gold Trust Shares of the iShares Gold Trust
iShares Gold Trust ( IAU ) is a passively managed ETF that seeks to match the movement of the price of gold . It provides an investment vehicle for gold by backing shares in the ETF with gold bars held in trust.

After a steady recovery from the trough of March 20th, a trend reversal starting on Aug 5th manifested as a descending triangle (or perhaps a large pennant ) that broke out to the downside after 7 weeks.

However, this downside breakout was rebuffed by buyers, perhaps due to the economic and political uncertainty surrounding the pandemic as well as the US presidential election, which at the time of the turn around was 40 days away.

The ETF saw a 4% increase in value over two weeks and has settled into an ascending pennant where resistance is being tested and the lows are higher.

I anticipate a breakout to the upside if the bottom ascending line holds, especially as we near the US presidential election (Nov 3rd). This breakout may occur in the days leading up to the election, or perhaps right afterwards.

Let me know what you think in the comments!

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These ideas are presented as a topic for discussion and do not represent a recommendation to trade a security.
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