A Fool And His Money

The Fed cut the discount rate to 0.25% today in hope to stimulate the economy by getting the banks to start lending and the consumers to start borrowing. With rate this low, the dollars will fall and gold will rise. Looking at the gold ETF, GLD, one can see prices have been moving upward and looks like it will continue to rise. Here is a chart for GLD:



This EFT has been on a down trend since the beginning of the year. In the latter part of October and mid November, GLD made a bullish double bottom. Then it proceeded to go above the 50 SMA and came back below it after a brief period trading above the 50 SMA level. Within the last 10 days, GLD gapped above the 50 SMA and moving toward the 200 SMA. After GLD move above the trendline around $86 level, look for it to move up to the low 90s. As the dollars get weaker, gold will continue to go higher. I'm not one of those fools with his money sitting still. I will put some of my money to work by buying the gold ETF, GLD.