The Price Of A Gold Shares ETF And The Price Of Gold Stocks: Trending Up

&l;p&g;&l;img class=&q;dam-image bloomberg size-large wp-image-34074989&q; src=&q;https://specials-images.forbesimg.com/dam/imageserve/34074989/960x0.jpg?fit=scale&q; data-height=&q;640&q; data-width=&q;960&q;&g; Photographer: Simon Dawson/Bloomberg

Six months ago, at the beginning of October, 2018, the yield on the 10-year US Treasury bond sat at 3.2%.

The price of the &l;a href=&q;https://us.spdrs.com/en/etf/spdr-gold-shares-GLD&q; target=&q;_blank&q;&g;SPDR gold shares ETF&l;/a&g;&a;nbsp; -- a proxy for the gold price -- was 112.

Today, the 10-year rate is 2.39%, quite a drop in the return of the government&s;s most watched paper.

And, right now, the price of those gold shares is 121, a nice gain for those holding the NYSE-listed precious metal ETF.

Many explanations exist for this relationship, but the most basic is that lower rates designed to pump growth also give rise to concerns about the inflation that often accompanies such growth.

So, those investors who&s;ve been around and seen a few of these economic cycles, begin to pick up gold, the old inflation hedge that never goes away.

So, if rates continue to fall...does the hedge continue to rise?

These charts are designed to show where this trend might be headed and where the support and resistance levels might exist. I&s;ll start with the precious metal itself and then take a look at a few stocks 0f&a;nbsp; companies that mine the stuff.

Here&s;s the daily price chart for gold:

&l;img class=&q;size-full wp-image-5275&q; src=&q;http://blogs-images.forbes.com/johnnavin/files/2019/03/GLD-daily-3-28-19.jpg?width=960&q; alt=&q;&q; data-height=&q;928&q; data-width=&q;1240&q;&g; GLD SPDR ETF daily price chart.

The clear rise in price from August, 2018 to February, 2019 follows the drop-off in interest rates over that same period. You can see that the gold ETF has managed to stay above the up trending &l;a href=&q;https://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:ichimoku_cloud&q; target=&q;_blank&q;&g;Ichimoku cloud&l;/a&g; since it crossed over in October.

Right now, price is testing the uptrend by consolidating with a drop that almost takes it below the cloud again: below the 121 level would begin to call into question whether the gains can be held. A move above the 127 high, on the other hand, would tend to confirm the continuation of the rally.

Here&s;s the weekly chart:

&l;img class=&q;size-full wp-image-5277&q; src=&q;http://blogs-images.forbes.com/johnnavin/files/2019/03/GLD-weekly-3-28-19.jpg?width=960&q; alt=&q;&q; data-height=&q;928&q; data-width=&q;1240&q;&g; GLD SPDR ETF weekly price chart.

From a pure technical analysis perspective, this is a classic triangle pattern: it&s;s winding up for a big move in one direction or the other. That&s;s the wisdom. If accurate, then resistance may be that slight downtrend line connecting the 2016 high at 131 with the early 2018 peaks at just above 129. A close above that line might be significant.

Also significant would be a close below the line connecting the late 2015 lows with the late 2018 lows. Such a pattern would negate the uptrend now in place.

Here&s;s the daily chart of a widely traded NYSE-listed gold mining stock:

&l;img class=&q;size-full wp-image-5281&q; src=&q;http://blogs-images.forbes.com/johnnavin/files/2019/03/GG-daily-3-28-19.jpg?width=960&q; alt=&q;&q; data-height=&q;744&q; data-width=&q;990&q;&g; Goldcorp daily price chart.

The upward trending movement of Goldcorp is benefiting from both the rise in the price of gold and the rise in stocks in general. It&s;s above the trend line and above the &l;a href=&q;https://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:ichimoku_cloud&q; target=&q;_blank&q;&g;Ichimoku cloud&l;/a&g;. Note that the stock is susceptible to volatility: that October, 2018 drop -- with the huge gap down -- took the price rapidly from 11 to 8.5. That &q;gaps get filled&q; -- a technical analysis maxim -- is demonstrated within less than 3 months.

And here&s;s the daily price of a different precious metals equity:

&l;img class=&q;size-full wp-image-5282&q; src=&q;http://blogs-images.forbes.com/johnnavin/files/2019/03/AEM-daily-3-28-19.jpg?width=960&q; alt=&q;&q; data-height=&q;744&q; data-width=&q;990&q;&g; Agnico Eagle Mines daily price chart.

Agnico Eagle Mines is another NYSE-traded gold miner benefiting, generally, from higher metals prices and from higher stock market action. It&s;s well above the uptrend line and above the &l;a href=&q;https://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:ichimoku_cloud&q; target=&q;_blank&q;&g;Ichimoku cloud&l;/a&g;. Should a sell-off arise, then perhaps that gap in price 39.5 to 40 from January might be a target.

&l;em&g;I do not hold positions in these investments.&a;nbsp;No recommendations are made one way or the other.&a;nbsp;&a;nbsp;If you&s;re an investor, you&s;d want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor.&l;/em&g;&l;/p&g;

Yes, You Should Still Own Boeing Stock

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Boeing stock might be taking a beating right now, but investors should be licking their lips at the prospect of picking up the company's shares at a bargain price.

Over the last month, shares of Boeing Co. (NYSE: BA) have fallen over 15% as the company battled controversy following the crashes of its Boeing 737 Max 8 airliner.

We shouldn't be surprised. Wall Street tends to put a company on the chopping block anytime there's the slightest hint of bad news.

However, they're letting fear get the best of them.

You see, while frantic headlines have pushed the herd away from Boeing, the company's underlying financials suggest that this titan of the airline and defense industries is still a great buy.

Today, we'll show you why you should pick up Boeing stock while everyone else is looking in the other direction…

Boeing Can Weather the PR Storm

At the beginning of March, BA stock was riding high on strong international demand and robust production numbers.

However, following two Boeing 737 Max 8 jet crashes, the company shares have plummeted over $60 as fear-mongering headlines drive investors toward supposedly greener pastures.

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We certainly aren't diminishing the tragedy behind these crashes. We also recognize Boeing's responsibility to fix its software malfunction before putting the planes into operation. But from a pure moneymaking perspective, savvy investors have seen this play before.

You see, Boeing is far from the first company to go through a dramatic public relations crisis that's tanked its stock, only to see it surge back to life later.

In fact, some of the biggest names on Wall Street have weathered media disasters and left skittish investors kicking themselves on the other side.

Just take Starbucks Co. (NASDAQ: SBUX).

Last April, Starbucks was rocked by controversy after the company was accused of racially profiling customers at one of its Philadelphia locations.

The accusations led to a national campaign to boycott Starbucks in an effort to pressure the company into making significant reforms.

Following the event, many investors worried that the massive backlash would result in a reckoning for Starbucks' bottom line and cut into shareholder returns. Shares of Starbucks dropped roughly 5% after the incident.

However, it turned out that all the negative press had next to no impact on the company's sales and profits.

In an April 2018 conference call with investors, Starbucks CEO Kevin Johnson stated that the backlash from the incident in Philadelphia resulted in no drop in sales.

"We are not seeing an impact on sales as a result of Philadelphia," he said.

In fact, the company ended up reporting better-than-expected sales and a 2% growth overall.

As a result, investors who bailed on Starbucks following the firestorm of negative coverage missed out on real returns for shareholders.

In fact, Starbucks stock has run up 28% since April's crisis, rewarding investors who weathered the storm with market-beating gains.

And Starbucks isn't the only giant that came out from under a PR disaster to deliver stronger returns.

United Continental Holdings Inc. (NASDAQ: UAL), commonly known as United Airlines, has been plagued by one scandal after another over the last two years and continues to come out on top.

In April 2017, the company was universally criticized after a passenger was violently dragged off of one of the airline's domestic flights to make room for company employees.

United's stock took a beating in the short term, falling 25% in the months following the incident as investors abandoned the company's stock.

However, despite the headlines, United has continued to post robust profits and has climbed up nearly 40% since 2017's losses.

And that's left investors who bailed licking their wounds.

Fortunately, you don't have to make the same mistake with Boeing…

Why Boeing Stock Will Recover

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