Gold, far from being a safe haven, really took it on the chin on Thursday. It was down $25 at one point. HUI busted down an eight-month, slightly upward channel.
Gold was part of a major sell-off in commodity related stocks on Thursday. The apparent trigger was the deadline for hedge fund redemptions. Anything that they were even suspected holding were sold down hard. The credit squeeze and the subsequent liquidity injection were the catalyst that gold bugs were hoping for to send the yellow metal soaring. So I’m left to wonder if that are anyone besides the most masochistic ones who hasn’t sold.
For kicks, I looked up the Alexa traffic reach for Kitco, the preeminent gold website. I was amazed to see well resolved peaks corresponding to Dec. 2003 and May 2006 – previous peaks in the PM complex. Traffic, and popular interest by inference, has steadily declined during the current correction and now stands at a level last seen in 2002. There may be a conclusion somewhere, but I’m too gun-shy to say it…
Let’s remember that markets always do the right thing, just not at the right time.