ETFs that track the price of gold and gold miners, including SPDR Gold Trust (GLD), Direxion Daily Gold Miners Bull (NUGT), Market Vectors Gold Miners (GDX) and Market Vectors Junior Gold Miners (GDXJ), dominated the StockTwits.com trending bar of most-discussed tickers Tuesday morning, as gold dropped 2.5% to $1,294 an ounce. $1,300 an ounce was considered a key support level, given the metal's 200-day moving average.
Investors said dollar strength on yesterday's stronger-than-anticipated retail sales put pressure on gold prices. They also blamed news out of China that indicated the country's demand for gold was fueled by Chinese business efforts to use gold as collateral and not consumer desires to own gold jewelry and items.
With inflation so low, gold may also be losing its luster as an inflation hedge. Consumer prices did edge 0.2% higher in March, according to data released this morning by the Bureau of Labor Statistics.
Prices increased 1.5% in the last 12 months with the data not adjusted for seasonality. But inflation remains far below the Federal Reserve's target of 2%.
Some investors say the weakness is only temporary. They argue that gold prices will have to rise given the metal's traditional status as a hedge against inflation and stock risk.
But with sentiment more than 51% bearish on the SPDR Gold Trust, the ETF that tracks the price of gold futures, most investors on StockTwits.com see more burns ahead for gold longs.
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.