Gold has fallen more than 10% since last October, and the SPDR Gold Shares (GLD) ETF has been tumbling right alongside (Disclaimer: past performance is not necessarily indicative of future results). But last week, a significant milestone in the decline was reached: GLD dipped below its 100-week moving average (MA):

Disclaimer: past performance is not necessarily indicative of future results.

Despite talk of India and Russia beefing up their physical gold reserves; despite inflation fears in the US driven by Fed monetary easing; despite all the reasons gold bugs told us gold just had to go higher… gold has gone lower. Maybe people are more into diamonds now, but whatever the reason – a few items jumped out at us in looking at the chart of GLD above:

• We’re still not below the 2012 lows, so at least one support level is still in place.
• The last time GLD traded below its 100-week MA? Late 2008. The last time before that? Never. (GLD was only launched in 2004)
• Since it last crossed below its 100-week MA, GLD is up more than 100%.
• At 547 days since its last high (8/22/2011), this is the longest GLD has ever had between new highs.
• The 100-week MA for GLD has never decreased. Granted, GLD started in late 2004, just in time to follow a historic rise in gold prices, but still… the 100-week MA has always been increasing. Surely, at some point, we will see a declining 100-week moving average?

Last time, GLD’s foray below the 100-week MA was relatively brief, and was followed by a succession of new highs over nearly the next 3 years. But this time? As we often say, trees don’t grow to the sky. Gold bugs often come equipped with a filter that makes everything look bullish for their favorite metal – calling this just a consolidation before the next breakout higher. But the dominant narrative now appears to be that a strengthening economy will mean no new easing from the Fed. Without cheap money stoking fears of inflation, there could be even more downward pressure on the yellow metal.

Some of the CTAs we track are currently cheering the decline with short positions in gold, including Covenant Capital Management Aggressive and Quest Partners, LLC AlphaQuest Original. And what if the gold bugs are vindicated in the end with a reversal of this trend leading to rising gold prices? Well, then these managers will likely exit their positions, and perhaps even go long. But for now, they are hoping to see even lower lows, and some more distance between prices and the 100-week moving average above.