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Lower-highs and breaking down through Hedgeye’s immediate-term TRADE line of support ($1398). That’s bearish.

We get the bullish position in gold (we sold our long position on December 6th, 2010). We get the bearish position on Fiat Fools (we coined the term in 2010). We also get that gold can go down when global bond yields are going up. Gold, like any other asset class, has to compete with yield (we shorted GLD on December 29, 2010).

If you’re in the ‘I love Heli-Bens’ camp and you don’t see inflation, you’ll only perpetuate my bearish case for gold. That’s because when I am talking about competing with yields, I’m talking about real-interest rates (adjusted for inflation). If your inflation assumption is lower than mine, you should be more short of gold than I am.

I don’t plan on being short gold in perpetuity. But I am going to try my best to stay short it until we anniversary January 21, 1980. If you have a 23 year old gold trader on your desk who didn’t see that historical time stamp, send him my twitter link.

There’s no support for the gold price down to the intermediate-term TREND line at $1352/oz.

There’s always risk to be managed somewhere,


Keith R. McCullough
Chief Executive Officer

Gold: Bearish Is As Bearish Does - 1