In trading on Tuesday, shares of the iShares Gold Trust ETF (Symbol: IAU) entered into oversold territory, changing hands as low as $79.68 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.
In the case of iShares Gold Trust, the RSI reading has hit 29.8 — by comparison, the RSI reading for the S&P 500 is currently 46.8.
A bullish investor could look at IAU’s 29.8 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.
Looking at a chart of one year performance (below), IAU’s low point in its 52 week range is $61.37 per share, with $104.40 as the 52 week high point — that compares with a last trade of $80.06. iShares Gold Trust shares are currently trading down about 1.7% on the day.
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Further IAU Research:
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