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Gold Off $100; Trades Down to $1630

Posted By Barry Ritholtz On September 23, 2011 @ 3:00 pm In Credit,Gold & Precious Metals | Comments Disabled

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Live New York Gold Chart [Kitco Inc.] [1]

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What is up with Spot Gold prices lately? After trading up to $1900 (double top?), its been a painful ride down. Today, it broke through $1700 to the downside, which may flip a few technicians negative.

Over the past few months, we have discussed Gold as a trade repeatedly. In the presentation I made at the Agoroa conference in Vancouver, I titled one section “Gold is a Trade, Not a Religion [3].” We also noted that Diverging ETFs: What Are GLD & SPY Telling Us ? [4] (August 23rd, 2011).

The Gold trade may not be over — especially if we eventually see a QE3 — but for now, it looks like it is going to be a painful backing and filling process, as the shiny yellow metal consolidates all of 2011′s gains. In 4 days, Gold has retraced 6 weeks of gains, taking us back to prices last seen in early August. I have heard rumors of Gold being sold to cover margin calls in equities.

Serious support exists at 1600, then at the 200 day moving average, around 1525 . . .

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NOTE: Here is what I discussed at Agora: When the long term trend channel has an upside parabolic breakout, you have to peel off 10 or 20%. You can always buy it back cheaper, when the parabola collapses.

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URLs in this post:

[1] Image: http://charts.kitco.com/KitcoCharts/?utm_source=kitco&utm_medium=banner&utm_content=20110215_iCharts_bottom&utm_campaign=iCharts

[2] Image: http://www.ritholtz.com/blogjavascript:NewWindow(

[3] Gold is a Trade, Not a Religion: http://www.ritholtz.com/blog/2011/07/bulls-bears-piigs/

[4] Diverging ETFs: What Are GLD & SPY Telling Us ?: http://www.ritholtz.com/blog/2011/08/etf-watch-gld-now-more-valuable-than-spy/

[5] Image: http://www.ritholtz.com/blog/wp-content/uploads/2011/09/gold-channel.gif

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