This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

'Perfect Storm' Sends Gold Bugs Scurrying (Update 5)

These easing policies, combined with economic uncertainties in Europe, have led many analysts and investors to believe buying potential remains in play for gold.

Reports emerged last week that Cyprus is selling its gold reserves, which has led many investors to wonder if struggling nations like Portugal and Spain will also begin to liquidate their gold holdings in exchange for more capital.

Chinese gross domestic product grew 7.7% in the first quarter of 2013. The figure trailed economists' expectations of 8% growth, according to a Reuters poll, and receded from the 7.9% growth the country saw in the fourth quarter of 2013.

Silver prices for May delivery sank $2.97 to $23.36 an ounce, while the U.S. dollar index was gaining 0.21% to $82.30.

"One of the problems I think . . . is the fact that gold investment for many has almost become religious; by that I mean there was nothing really that would call for lower gold prices, only higher," Ole Hansen, head of commodities strategy at Saxo Bank, in a phone interview from Copenhagen. "A lot of people have been clinging onto this investment throughout the last six months . . . but you could easily find arguments convincing yourself you are on the right idea."

Ole said his projection for 2013 has been gold at $1,200 an ounce.

Gold dropped more than $60 an ounce on Friday as the precious metal crashed through multiple levels of technical support, which signaled a shift to a bear market. But electronic trading in the late hours of Friday signaled the gold selloff had not reached a bottom, Phil Streible, a senior commodities broker at RJO Futures, said in an interview.

"At the end of Friday's electronic session the market was about $40 lower [than the settlement price], so these people would have to . . . meet the losses," Streible said. "So over the weekend you saw a lot of traders reassessing their positions, and not only individual traders but these are also large funds and hedge funds as well that are forced to liquidate."

Liquidation pressure and long-only funds on Monday -- similar to Friday's trading action -- were continuing to sell off their positions.

Stock quotes in this article: GLD, IAU, SGOL, ABX, GDXJ 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs