Gold - Paper and Physical

The blue circle represents the first attempt to clear the 12/4 overhead gap. The surge was strong, but lacked the necessary energy for a clean break.

There will be at least two more tests of this gap.

Shrinking volume into the May 6th gap and since the reaction high represents continued dissipation of downside energy. This suggests that once the margin clerks step aside gold will retest its reaction high.

Gold ETF (GLD):



GLD is simply a study of paper gold. This is not interchangeable with physcial gold interpretations. When push comes to shove, and it will, the scramble will be for physical rather than paper gold.

During the height of the 2009 panic, physical gold, represented by the audited central gold trust of Canada (GTU), surged relative to paper gold (GLD). In other words, the GTU to GLD ratio spiked.

Yet again the GTU to GLD ratio is beginning to climb as investors pay up for the real thing. This ratio is certain to increase as the international debt crisis intensifies and evolves over time.

Central Gold Trust to Gold ETF (GLD) Ratio: