Thanks for nothing Gold. We finally stopped doubting the rally, and had even started doing blog posts on how fast the rally was happening. And just two days ago were all set to update our post on Gold’s rapid ascent, saying ‘That was Fast(er), and showing how the move from $1,800 to a close above $1,900 was the fastest yet (besting the 10 days it took to go from $1,700 to $1,800.
But there’s just one little problem – Gold never closed above $1,900. It came darn close ($1,891 or so), and hit a high of $1,917, but then preceded to fall from that level, not by $20, $30 or even $75 – try a loss of $160 in two days. Now, that is just an 8% loss, and takes us back all the way to just seven days ago – so we’re not talking an Oct. 1987 style crash for the yellow metal. But still – $160 in two days is nothing to shake your head at.
Whether or not the dip in gold is here to stay depends, but it does bring a few thoughts to mind:
- Did we just witness the all time high ?
- We’re still above the 50, 75, and 100 day moving averages – meaning technically this up trend is still intact.
- Gold would likely need to get all the way down to $1,425 or so to signal systematic programs to go short. It would be great to see the managed futures space make money on the short side with Gold after so many others have failed trying to pick a top.
- Silver got crushed right alongside Gold today, a day after signaling at least one program we know of long. This only confirms what we have believed for quite some time – Silver is essentially untradeable. It sold off -9% to start August, rallied 16%, and has now fallen another -10% to end up at essentially the same spot.
- We’ll pay good money for a trade confirmation showing a sell at $1917.90 on Tuesday night. Would look great framed in an office, or could go for quite a lot to contrarian hedge fund manager at an auction some day.
- We are getting more and more clients who are choosing to hold excess cash in Gold (sorry about today) rather than T-Bills or at the bank earning less than 1%. You get a warehouse receipt held in your account at Attain which can be used to fund investments in CTAs and your own trading, etc.
- We’ve said it before, we’ll say it again. Unless you like losing 20% to 50% instantly upon your purchase – Avoid Gold Coins, and specifically Goldline.