Bye Bye Gold?

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. 

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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.

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.

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