Monday, April 15, 2013

Massive gold sell off causes 2 year low, now what?


At this time of writing gold is still trading at a little over $1400 an ounce. This massive sell off that occurred last Friday (look at the volume on the chart above!) is what shaved $100 an ounce off in such a short period of time. Investors are no longer interested in gold it seems and are rather putting their money elsewhere, something more risky and preferably with a higher return: that's what happens when risk appetite comes back! The Dow has never traded so high and is almost near a whopping 15,000 points, it's never been so rosy in trading land, even the VIX ($VIX) shows it - trading a little over 12 points - despite some turmoil in the European Union (Cyprus, Greece etc). 

The question as always is: how low will it go?

As of right now 52% of traders are bearish when it comes to gold. Couple of different ETF options here, including $GOLD, $KGC, $GDX and $GLD - no matter which one you pick the recent drag on gold affected all of them. Which such a high volatility it is just a downward slope from here, judging by the charts and some fundamentals I see gold dropping well under $1350 an ounce! In fact, if you can manage to snatch gold at around $1400 - the rate it is going for right now: SHORT IT LIKE NOBODY'S BUSINESS. 
I think I made myself clear that I'm pretty bearish on gold. 

Shorting it right now, with my target set on $1350 and my SL $1450 - pick your own ETF!

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