This Molten Gold Needs to Cool Off

 | Sep 23, 2011 | 10:56 AM EDT  | Comments
  • Comment
  • Print Print
  • Print

Is there anything more telling than the destruction of gold right now? It tells you the hedge funds are positioned wrongly, and are furiously liquidating, as the dollar gets stronger and deflation is in the air.

What to do? First, let's have some perspective: Gold is up 34% year over year. To me that means profit-taking is in order, as the price is still very elevated. I know I am a gold bull, but even bulls can't be blind to the possibilities of a decline after that kind of run.

Second, remember who owns a lot of gold. Right now some fund managers who could face liquidations are in big. They may have to go out big.

Third, gold's been rising for 10 straight years. Could it take a breather? Holy cow -- why not?

What to do? I say wait until you see the whites of the gold sellers' eyes. Let's call it $1,500 per ounce for now.

Then come right back in.

I'm still a gold bull long-term. I'm just way too cognizant of how people have to sell gold, like everything else, and I don't want them to knock me back while they run out the door.

Columnist Conversations

A gravetone doji candle formed on the weekly Facebook (FB) chart. This candle is defined by a narrow opening a...
The iPath Bloomberg Sugar SubTR ETN (SGG) is pushing up towards a test of its prior rally peak at 33.94, which...
We added some call plays on Microsoft and Celgene today on the very strong price action (msft) and flow, and t...
Juniper Networks is the number three gainer in the S&P 500 today(behind Amazon/Microsoft). The stock...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.