Gold: Bye-Bye 2012 Gains

By Traders Huddle | May 14, 2012 AAA

New York, May 14th (TradersHuddle.com) - Gold's status as a risk asset has been catching up with it several weeks now, sending traders a signal that bad things are one the way. Well, another bad thing arrived today as the yellow metal finished the day on a down once again, wiping out 2012's gains in the process. The strengthening U.S. dollar was no help as PowerShares DB US Dollar Index Bullish (NYSE: UUP) added 0.4% today on volume that was well above the daily average.

The SPDR Gold Shares (NYSE: GLD) lost 1.5% on volume that was above the daily average. GLD touched a session low of $151 a share. It was the first time this year GLD has fallen below its 2011 closing price of $151.99 a share, according to ETF Trends. The iShares Gold Trust (NYSE: IAU) lost 1.5% on volume that was about 40% above the daily average. That fund has now lost about 5% in the past week as the dollar moves to multi-month highs against the Euro.

Net long positions in gold by hedge funds and money managers are at the lowest level since December 2008, ETF Trends reported. Comex gold for June delivery plunged to 1$561 an ounce today after trading as low as $1,555 an ounce and some traders now see $1,520 an ounce as the next stopping point. Gold has been trading below its 200-day moving average since the end of March, a sign to some who study charts of trading patterns to predict trends that the rout has further to go, Bloomberg reported.

Holdings at gold ETFs have remained steady, but that hasn't kept other precious metals ETFs from being badly battered. The iShares Silver Trust (NYSE: SLV) slid 2.4% today and while volume was weak, that was enough to take the ETF below $28, reiterating the view that SLV will retest its 52-week low below $26 sometime in the not too distant future.

The other white metals are showing similar destruction as the ETFS Physical Platinum Shares (NYSE: PPLT) dropped 1.8%. That was the same loss sported by the ETFS Physical Palladium Shares (NYSE: PALL), which has slid 9% in the past week. In the case of PALL, it appears painfully obvious this fund will retest its 52-week low below $53 soon.

Barron's was bold enough to say this about gold miners: "The evidence is too good to ignore. Gold-mining stocks have turned the corner relative to the yellow metal and could soon be moving higher." That didn't mean much as the Market Vectors Gold Miners ETF (NYSE: GDX) dropped 3.4% on strong volume and the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) plunged over 4% to another all-time low.

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