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| Why I'm Selling Gold |
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| Written by Trader Mark | |
| Tuesday, 16 June 2009 11:40 | |
Gold many times trades in its own universe, and I sometimes am suspicious of how useful charts are. That said, I am going to respect the fact the gold ETF (GLD) just broke its 50 day moving (exponential) average and cut back our stake to a large extent. (please note the simple moving average is $90.40 so still in decent shape there) I sold 1/4 of our Powershares DB Double Long Gold (DGP) June 2nd to lock in some gains as the chart went parabolic over $22. I am going to cut 80% of the remaining position here around $19.70 and look to buy lower.DGP June 2nd on previous sale  DGP today Let's revisit when GLD gets down to the 200 day moving average, $88ish if and when.We've been saying for a week or so now that the "dollar weak, bond weak" trade was getting very overcrowded - even if I believe those trends are correct in the long term. They were due for a technical correction. And this whole market right now is "dollar weak, commodities up" based. So we are hostages to a very simple relationship... which is reversing for the short term at least. We'll see how long- lived it is; if it is very short-lived one should be buying commodities hand over fist right now. But it would not surprise me to see the dollar rally for a bit more here as the chart below shows some easy upside before it hits resistance. 
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