"Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions."
-
Sun Tzu

Thursday, February 14, 2013

Back into Shorting Gold

Today I initiated a short position in GLD. I discussed my rationale here. Here are some more points:

Some pundits claim that Dollar strength is responsible for Gold's weakness.  I don't agree. The following chart shows that the US Dollar has been moving sideways during the last months, but Gold is clearly in a downtrend:

Gold trending down while US Dollar moves sideways

The other reason is sentiment: take a look at Finviz and you'll see a lot of bullish comments. 

Examples:





Too many bulls for me. So here is my take why investors are obviously dumping the metal: everybody is talking about investment money moving from bonds to equities. What if it is actually moving from Gold to stocks as well?