Gold Traders Eye Downside Targets Ahead of Bernanke Testimony (GLD) (IAU) (SLV)

SPDR Gold Trust ETF (NYSE: GLD) is trading slightly lower in pre-market trading on Monday. iShares Silver Trust ETF (NYSE: SLV) is also trading lower. This morning's move lower is tied to a slightly higher U.S. dollar. The correlation between the dollar and gold stood at -0.68, steady from Friday and the strongest inverse correlation in nearly three months, according to Reuters data.

According to data released for the week ending July 10th, institutional investors cut their long positions in U.S. gold futures by 20 percent. Traders are positioning themselves ahead of Tuesday's testimony by Fed Chairman Ben Bernanke. Bernanke’s comments could cause swings in GLD, SLV, and the U.S. dollar, particularly if they reveal clues about future quantitative easing in the U.S., or the lack thereof.

From a technical perspective, spot gold and SPDR Gold Trust ETF (NYSE: GLD) will look to take out near term downside support, but traders say an extended move lower will likely be a slog, particularly if the U.S. dollar weakens.

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