Add this move to the list of unexpected market developments since Donald Trump won the election: gold is now trading at its lowest price since June.
Today’s -2.4% slide comes on a bond market holiday (Veteran’s Day), with fixed income influence mostly out of the picture. From ZeroHedge:
Over 85,000 gold futures contracts (over $10 billion) just traded as gold plunged from $1260 to $1230 as US equity markets opened.This is the worst 7-day run for gold since November as Dec rate hikes were jawboned more likely.
If the yellow metal closes lower today — which is a near guarantee at this point — it’ll mark five consecutive days of losses. Even more surprisingly, gold’s plunge comes amid emerging market weakness, higher inflation expectations, and the promise of deficit spending on infrastructure from the new Republican regime.
The largest ETF tied to gold prices, the SPDR Gold Trust ETF (NYSE:GLD), fell $1.92 (-1.60%) to $117.83 per share in Friday morning trading. Year-to-date, the GLD has still gained 16.03%, but the fund is now more than 10% off its 52-week highs of $131.15.
Investors looking to capitalize on further gold weakness can consider the double leveraged inverse ProShares UltraShort Gold ETF (NYSEARCA:GLL). The GLL is up more than 11% over the past five trading sessions amid gold’s worsening decline.