The price of gold has dropped 4.62% over the last two days.
This may be a good sign for the market.
I posted a blog a few days ago about gold. I talked about how the price of gold is anti-correlated as the market overall, and that the recent run up was a consequence of a flight to safety.
The recent drop in the price of gold has some people worried that the gold bubble may be bursting. I’m not in that camp. I think that what we’re seeing is people selling gold to step back into the market. This view is supported by the fact that folks are also selling Treasuries.
However
I will be watching gold closely in the coming days for any signs that the bubble may be bursting. And I will also be trimming my position in gold, mainly because I’m becoming more bullish and want to raise money like everyone else.
disclosure: Tucker Balch is long GLD.
August 4th, 2012 → 2:33 pm
[…] What the Gold Drop Means […]