Time to exit the long gold trade?

With Gold crossing below its 100  day moving average last week (after crossing below the 80 day the week before, and 50 day the week before that), some managed futures prorgams we track were seen exiting long positions in the metal. With Gold having gone nearly three months now without making a new high, a few are starting to wonder if the trend is finally over for Gold? Or is this just a breather for the yellow metal before powering higher?

While only down -5.45% since making a high of 1421 on 11/09/10,  Gold has failed to break above the 11/09/10 high for 73 days now, although it came close on 12/07/10 (1420) and 1/03/11 (1420.30) to make a case for a triple top.

This got us to wondering what the average time between new highs has been in Gold since the most recent rally began in October of 2008 (up $631/oz, or 88% since 10/24/10), and we found that the average time between new highs has been just 13.72 days.  Even more impressive, Gold has averaged a new high every 17.8 days over the past 10 years while moving from $264/oz to $1,343/oz.  The longest time between highs, meanwhile, has been 200 days for the current 08-present rally, and 548 days for the full 10 year period.

What will the GLD and all the Gold as 10% of your portfolio people be doing if we break that 548 day record by staying below the Nov. 2010 high for another year and a third ???  Only time will tell, but I don’t think it would be pretty (Gold $600, $800?).


One comment

  1. Today’s early trade has featured a move below the 1327.00 low from 11/03/10.

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.