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Takeaway: It's just getting ugly for gold.

How’s that gold trade working out for the gold bugs?

If what we’re seeing after its latest freefall is considered a “bounce,” then I don’t want to be long bounces. It's just plain ugly out there.

Seven months or so ago, we said gold could go to $1271. I remember saying that at the Money Show. At least half the room shot their arms up and asked incredulously, “Did you say twelve?” Yup, that’s what I said.

Pity the (Gold) Fool! - Gold 2

Well, there you have it—a “12” handle in front of gold.  Gold is down around 24% YTD. That’s called a correction. 

$1254 is the new line of support. Guess what comes after “12”? Not “13”. It could easily be an “11” handle. 

Heck, why not $800 for gold?

At the end of the day, if interest rates keep rising, gold is going to have a hangover the likes of which we’ve never seen. 

(Editor's Note: This commentary comes from from Hedgeye CEO Keith McCullough's morning conference call. If you would like to learn more, please click here.)