Gold got slapped around pretty good today — down $19.

As I mentioned last week, I am short Gold for a trade. This was strictly a technical
trading call
; I still believe a 10% correction is possible — Gold looked
toppy, and gave several other technical and cyclical sell signals before the crackage.

While I think Gold eventually goes much higher, that is strictly a
product of my macro-economic outlook. This technical break looks significant,
and could see Gold pullback towards support, somewhere between $500-520 (See a
weekly chart for the best view).

A few of you have asked my opinion on how gold stocks might behave relative
to or during a market correction. The short answer is "I don’t know."

The longer answer is that I’ve never analyzed companies relative to the
overall market moves; trying to game the execution of company managements ON TOP
OF tracking the precious metal is too difficult. Its an area where I have no
edge or special feel — and no expertise whatsoever.

 

>

DISCLOSURE:  Short GLD

Category: Commodities

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

9 Responses to “Still Short Gold . . .”

  1. royce says:

    It wasn’t just gold. The energy stocks got hammered, too. The energy ETF VDE was down almost 4%.

  2. spencer says:

    Shouldn’t you have a reason to expect every stock in your portfolio to out perform the market. Not that you will be right every time. But otherwise, you should just index.

  3. brian says:

    Yeah right spencer, that index is looking really nice lately. Especially when you factor in inflation.

  4. rwbil says:

    During the booming stock market of the 80′s we still had the ’87 crash. Similiarly, gold and the other commodoties will have pullbacks. I suggest buying the commodoties on the pullbacks. Looking at the price of gold it had gone up parabolically the last month or so. This is always a bad sign and a pullback was required. I bought a little on today’s pullback and will buy more on future pullbacks. But my favorite commodoty right now are the agricultural products.

  5. kdawg says:

    Gold has been moving in seasonal patterns much like anything else. The addage ‘Buy in May and go away’ has worked well for gold the last 4 years. Gold usually corrects about now as Xmas season is over. International demand around Xmas goes up as gold is given as gifts in countries such as India.

  6. Larry Nusbaum, Scottsdale says:

    Today we had one of the largest one day drop in gold over the last 25 years.(down almost $20.00)
    Gold has lost it’s luster for now. The next step is probably around the 50 day moving average(537.00)

  7. John Navin says:

    Excellent call, Barry.

  8. alan says:

    I think Bernanke will have to prove that the US economy can really grow without house prices going up, otherwise gold is going to continue to go up.

  9. Jordan says:

    Looks like the correction is finally here. The HUI has already fallen 10% from 350 to 315 in a matter of days. 280 is a strong buy imo, as well as gold at $520. I’m still thinking we see $750 this year.