NEW YORK ( TheStreet) -- Gold was crushed 22% lower in the second quarter of 2013. TheStreet's Gregg Greenberg talked to Phil Streible of RJ O'Brien about whether gold has more downside left or if it makes a safe investment.
Gold has largely declined due to the limited effects from inflation and on the back of recent talks of the Federal Reserve tapering its stimulus program, which could happen as soon as September, Streible says. He added that the $1,200 level in gold was a line in the sand for traders, marking that as their downside target.
There was a large inflow of fresh money from new buyers when gold broke that level and when silver broke below $18 per ounce, as both metals snapped back higher and closed above those prices.
Retail investors weren't the only ones caught up in the gold slaughter. Greenlight Capital's David Einhorn and John Paulson's gold fund have been crushed. However, according to Streible, these guys have the "staying power" to hang in there and adjust their positions accordingly.They will likely look to specific strategies to enhance gains, while limiting further downside and in a way, they can move markets. Although by price action alone that may be hard, they still have the press. When people see names like Paulson and Einhorn making large purchases (or sales) of specific assets, investors and traders tend to follow the big money, aiding in large swings to the upside or downside, he added. Streible concluded, "I think we're going to start to work our way up from here." -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell