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Gold hovering above $1,500 was a bit ridiculous, no? Was this real life? Personally, I was starting to get that sinking feeling in my stomach. Did we witness the piercing of the bubble?


(Chart created using Hidden Levers app)

This feeling comes over me when I start hearing the same guys who lost it all in 2008, just now saying "Buy gold, the dollar is dead." Nothing wrong with investors want to keep the value of their dollars, but I would be cautious of writing off the dollar just yet. Last week's toppy behavior in gold following Fed's press conference tells me that we might have had a solid trigger the bear market for bullion. Any decision to boost interest rates may bring about a correction. I never thought we would have such loose cash for this long. This market is astounding, anyone who missed it is banging their heads.

Fortunately enough for those who missed out we now live era of transparency. We actually have some form of time table for when to expect a correction. Come June-July when QE2 ends marks a return to reality, here are some short gold plays you might want to consider. Hiddenlevers helped me identify three of the most well-correlated equities with gold - Allied Nevada Gold Corp (NYSEMKT:ANV), PowerShares Global Gold & Precious Metals ETF (NASDAQ:PSAU), and Silver Standard Resources Inc. (NASDAQ:SSRI).


(Chart created using Hidden Levers app)

Smart money knows this turkey is cooked, and these plays react strongly to Gold prices. Don't get distracted by the cool gold dispensing ATMs. The U.S. dollar isn't dead and this summer will be its come-back story. There is a growing undertone that we are due for some sort of a reversal. A quick look at HiddenLevers economic charting told me that, and figures show that shorts in the currency had subsided even as metals were climbing.

Source: How to Play the Gold and Metals Bust - 3 Short Plays