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From Tom Dyson, publisher, Palm Beach Research Group: Something interesting is happening in the gold market…
The price of gold rose for 12 years in a row, from 2000 to 2012. It’s now fallen two years in a row. If it closes the year below $1,200 per ounce, it’ll be three years.
Gold is at $1,100 per ounce right now. That’s its lowest level in 5.5 years.
Gold mining stocks have crashed. The index of gold mining stocks—the HUI—just closed at its lowest point since 2003. It’s down about 80% from its high in 2011… and crashed almost 30% in just the last three weeks.
Barrick Gold—one of the major American gold producers—just fell to prices not seen since 1989.
This all feels like a “puke”… like people are dumping their gold and gold stock investments for emotional reasons. They can’t take the pain anymore.
I suspect traders making a short-term bet on gold bouncing from here may make a quick profit. But they better have their risk management tools in place… or they could lose—big.
All PBRG subscribers can review our risk management protocol—the Palm Beach Three-Legged Stool of Safety—right here.