Gold Crushed! 2013 Losses Now Over 20%# Stock
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http://finance.yahoo.com/blogs/breakout/gold-crushed-2013-losse
Gold's brutal 2013 continues. The price of the yellow metal is dropping
again, off more than 2% today and breaking well below critical support. As
discussed on Breakout just last week, chartists saw $1,305 as a stop-loss
level. Once that support broke this morning the sellers came out in droves.
David Lutz, head of ETF trading at Stifel Nicolaus, says reports are
circulating that central banks are monetizing their gold holdings, adding
supply to an already weak market. He adds that the Bank of Japan is
concerned about deflation and India is still clamping down on their imports
of gold, eliminating even more potential bidders. "That's a lot of headwinds
for the metal this morning," Lutz says in the attached video. "That big gap
down that we saw took out the August lows. That triggered a lot of stop
losses from the quant shops."
For those uninitiated with trading terms, Lutz is essentially saying
institutions can't find any good reasons to get brave and buy gold at these
levels but there are some good arguments for selling, at least from a
technical perspective.
Sitting just under $1,270 on Friday, gold is stuck in a no man's land for
chartists. Lutz says there's some hope that the $1,250 price point might
provide some support "but it's a pretty tough trade at this point."
For gold devotees none of the above will be quickly shrugged off as the kind
of fear mongering that lets them add to their gold positions at relatively
cheap prices. Your portfolio is yours to do with as you see fit, but be
advised that after more than a decade of moving higher it could be years
before institutional traders become confident that gold is going to move
back to its old highs anytime soon.
Gold's brutal 2013 continues. The price of the yellow metal is dropping
again, off more than 2% today and breaking well below critical support. As
discussed on Breakout just last week, chartists saw $1,305 as a stop-loss
level. Once that support broke this morning the sellers came out in droves.
David Lutz, head of ETF trading at Stifel Nicolaus, says reports are
circulating that central banks are monetizing their gold holdings, adding
supply to an already weak market. He adds that the Bank of Japan is
concerned about deflation and India is still clamping down on their imports
of gold, eliminating even more potential bidders. "That's a lot of headwinds
for the metal this morning," Lutz says in the attached video. "That big gap
down that we saw took out the August lows. That triggered a lot of stop
losses from the quant shops."
For those uninitiated with trading terms, Lutz is essentially saying
institutions can't find any good reasons to get brave and buy gold at these
levels but there are some good arguments for selling, at least from a
technical perspective.
Sitting just under $1,270 on Friday, gold is stuck in a no man's land for
chartists. Lutz says there's some hope that the $1,250 price point might
provide some support "but it's a pretty tough trade at this point."
For gold devotees none of the above will be quickly shrugged off as the kind
of fear mongering that lets them add to their gold positions at relatively
cheap prices. Your portfolio is yours to do with as you see fit, but be
advised that after more than a decade of moving higher it could be years
before institutional traders become confident that gold is going to move
back to its old highs anytime soon.
