Roger Nusbaum submits: Gold is down a big chunk this morning. I've been writing a lot about gold lately as the trading kind of whipped up.
For a couple of days it looked like old friend Anglogold (AU) had found a bottom in the high $48s or low $49s but then it fell yesterday to $47.83 and is down another dollar today. I don't know where the bottom of this move is. For anyone with zero exposure to this part of the market I would advise building a half position here with whatever device you are comfortable.
This is more about having proper diversification. I don't think a portfolio is properly diversified with zero gold. The amount any one investor should have is certainly variable. I tend to gravitate to 3% in gold, which some readers have said is too low, but I have exposure to other commodity dependent holdings, possibly too much given how the last two weeks have gone.
Clearly a lot of capital has flowed out of this area -- just look at Newmont Mining (NEM), it has been pasted in the last six weeks. I don't get a great feel from the things I read about whether sentiment is waning but it makes sense to think sentiment has to at least be dented.
I mentioned that I expect to swap from the GLD ETF back into Anglogold at some point but not yet. I don't feel the need to try to bottom tick a swap. I emailed another blogger yesterday saying I thought this move is closer to a bottom than a top but today makes me look wrong.
GLD vs. AU vs. NEM 3 months:
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