• Investing Insights & Exclusive Offers → Get Our FREE “Market Brief”
    Sign-up for our free weekly newsletter. Get unparalleled investing insights and exclusive Summer Sale discounts on Hedgeye research.

    Disclaimer: By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails. Use of Hedgeye and any other products available through hedgeye.com are subject to our Terms Of Service and Privacy Policy

POSITION: Covering our short GLD position today

It never ceases to amaze me how universally accepted bullish cases can start to quickly come unglued. Gold has gotten us all paid since 2003 on the long side – we get that. But we also get that playing today’s risk management game has nothing to do with past results. Generally speaking, when real-interest rates are negative, gold outperforms. Not so much when they move, on the margin, from negative to positive.

Today, Gold is finally immediate-term TRADE oversold at or lower than $1348, so we’re covering the short position. That doesn’t mean we are no longer bearish on gold. Neither does it mean that we don’t reserve the right to get bullish on gold again if the professional politicians of the 112th Congress start to debauch the US Dollar again…

As a reminder, for accountability purposes, our recent moves in Gold have been as follows: 

  1. DEC 6th, 2010 sold our long position
  2. DEC 29th, 2010 initiated a short position
  3. JAN 20th, 2011 covered our short position 

Oversold is as oversold does, but as long as the intermediate-term TRENDs in both the USD and UST Yields continue to make higher-intermediate-term highs, I think gold will do the opposite. If these facts change, I will try my best to do the same.

My updated TRADE and TREND lines of resistance for Gold are in the chart below at $1387 and $1373, respectively.


Keith R. McCullough
Chief Executive Officer

The Golden Haze: Gold Position Update - 1