During times like these of heightened uncertainty, investors always look for ways to protect their assets from a multitude of potentially negative future events. With such concerns, professional as well as everyday investors inevitably turn to gold. And for good reason.

Historically, gold has been a reliable safe haven, holding its value in even the most troubled political and economic times and through the most vicious of bear markets. Gold is widely viewed as a classic hedge against inflation-related loss of purchasing power, but also to protect against a declining dollar. Gold is also a great tool for portfolio diversification, which seems even more important today as investments around the globe appear to be becoming more and more correlated.

On that note, let’s turn our attention to longer-term charts of State Street’s SPDR Gold Shares ETF (NYSEArca: GLD). This ETF’s objective is to reflect the relative performance of the price of gold bullion, minus expenses.

We begin by looking back at a weekly chart from 2005 through 2008. First, it’s plainly visible that the price of gold has been more or less on a continuous long-term upward trend in this period, from points (A–B) on the chart. At Point C, the technical investor was given a beautiful long entry signal, where the price was not only retesting the upward-sloping trend line but also had a clear upward break of a well-traced, 18-month “symmetrical triangle” at Point C.

More recently, over the last two years, we can see in the chart below that GLD has continued moving upward, but this time in a more consistent and predictable manner within a bullish price channel. GLD is now again at the lower boundary of the upward-sloping line (D–E) where price support has held on four separate occasions. (Those support points are indicated by the plus signs.)

In other words, we now appear to be at a critical juncture waiting for the charts to print a few more bars to give technicians a clearer signal of the ETF’s probable price direction in an intermediate time frame.

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