Gold & US Real Estate Break Trendlines – Major Correction in REIT’s Loom

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 2

While most of the focus has been on the market making new highs and how long it will last, Gold and US Real Estate (REITs) have been quietly breaking down.

Here’s a chart of the Streettracks Gold Trust (GLD) which seeks to track the price of gold bullion.  You can see it’s broken through an 8 month trendline with a drop to the next level of support around the 50 day moving average likely.

gold breaks trendline streettracks gold trust gld

After a tremendous 4 year run, it appears the REIT’s are on their last leg and setting up for a major correction over the next several months.  Two of the major real estate ETF’s that I track, the Ishares Real Estate Index (IYR) and the Ishares Cohen & Steers Realty Index (ICF) illustrate this break down.

real estate reit ishares ICF

IYR ishares real estate break trendline

It’s interesting to note that while US Real Estate breaks down, international real estate is holding up well as indicated by the SPDR Willshire International Real Estate Etf (RWX).  It broke out in May and is holding the breakout well.

international real estate streettracks RWK etf

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Comments on Gold & US Real Estate Break Trendlines – Major Correction in REIT’s Loom »

May 19, 2007

Wealth Building Lessons @ 12:18 am

good analysis. i’ll take this as a buying op for gold!

Tate @ 1:13 pm

I don’t doubt that gold is a decent holding in any portfolio over the long term, but in the short term it’s trending down and a break of that support area indicates further weakness. I’d starting adding to an existing position once it begins to show some new life.