SPDR Gold Trust - Breach of key supports suggests further correction

- SPDR Gold Trust could face more downside pressure in the weeks ahead after breaching several key supports, provided by the 8-month uptrend line and also both the 50-day and 100-day MA yesterday on relatively heavy volume.

- This especially if the shares fail to regain US$92.93 (support-turned-resistance level and 8-month uptrend line).

- But with the RSI indicator just falling into the oversold region under a strong downtrend momentum and the MACD indicator exhibiting a bearish centerline crossover yesterday, they support our view that further correction is likely.

- We expect the stock to find initial support at around US$87.66 (resistance-turned-support level), breaking which, the next key support is likely at US$85.06 (resistance-turned-support level and 200-day MA).

- Beyond US$92.93, the next resistance is at US$97.00 (Jun ’09 high).

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