The selling in the commodities markets is still strong. But with market volatility and global uncertainty on the rise, owning a bit of gold may be a defensive strategy.
SPDR Gold Shares (GLD)
from Nate’s Notes
While it has taken a bit longer for the heavy selling to hit the gold market, a quick glance at the chart to the right should make it clear that, along with most of the other commodity markets, sellers are now starting to dominate the gold market as well.
The strength of the U.S. dollar is being fingered as one of the primary culprits behind the decline in commodity prices, but as hinted at elsewhere, I believe it is still too early to understand and predict how this mostly unexpected (but clearly powerful and significant) trend will impact the big picture going forward.
I remain convinced that buying gold “now” will end up looking smart “later,” but in the meantime, I am lowering the buy limits a bit and GLD is now a buy under $122.
Nate Pile, Nate’s Notes, www.NotWallStreet.com, 707-433-7903, September 12, 2014