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Market Mystery: Gold Sell-Off

Wednesday, 19 May 2010 | 5:29 PM ET

Despite more twists and turns out of Europe, gold closed lower on Wednesday. What gives?

Questions about the viability of the euro and contagion fears drove gold to a record $1,248.95 an ounce last week. And current weakness is likely due to profit taking.

"When we hit all-time highs, everybody thought gold was going to shoot straight up to the moon. Now, a lot of people decide to take their profits, and the big banks just put in sell orders that hit the market," says COMEX gold floor trader Dominick Cognata in a Reuters interview.

What’s the trade?

"I don't think the selling is over yet, I think we still have another $20 on the downside," says Cognata.

"Gold fell so much in terms of other currencies that I might consider getting back in," counters strategic Dennis Gartman. (That comes one day after Gartman said run for the exits) "If the euro holds 124 and if gold does break below $1185 or so and holds, I’d get interested."

Market Mystery: Gold
Discussing why gold is falling if the world is falling apart, with Dennis Gartman, The Gartman Letter.




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Trader disclosure: On May 19, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (ITNC), (MSFT), (NUE), (BTU); Kelly Owns (WYNN) Puts; Kelly Owns (EXPE) Puts; Kelly Owns (EMN) Puts; Kelly Owns (CAT) Puts; nerman's Firm Is Short (IJR), (MDY), (SPY), (IWM); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Calls’ Finerman Owns (BAC), (BAC) Preferred; Finerman Owns (GS) Calls; Finerman's Firm And Finerman Own (HPQ)’ Finerman's Firm Owns (JPM), (JPM) Calls; Finerman Owns (JPM); Finerman's Firm Owns (PTV); Finerman's Firm Owns (PM); jarian Owns (AMD) Calls; Najarian Owns (ADSK) June Calls, Is Short (ADSK) May Calls; Najarian Owns (C) Calls; Najarian Owns (HPQ), Is Short (HPQ) Calls; Najarian Owns (JPM) Put Spread; Najarian Owns (MRVL), Is Short (MRVL) Calls; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (V) Call Spread; Najarian Owns (VRSN) Call SpreadTerranova owns (PFE), (GLD)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Mike Khouw
Cantor Fitzgerald is a Market Maker in (ADSK)
Cantor Fitzgerald is a Market Maker in (AIG)
Cantor Fitzgerald is a Market Maker in (AMAT)
Cantor Fitzgerald is a Market Maker in (BAC)
Cantor Fitzgerald is a Market Maker in (C)
Cantor Fitzgerald is a Market Maker in (CSIQ)
Cantor Fitzgerald is a Market Maker in (FSLR)
Cantor Fitzgerald is a Market Maker in (GS)
Cantor Fitzgerald is a Market Maker in (JPM)
Cantor Fitzgerald is a Market Maker in (LVS)
Cantor Fitzgerald is a Market Maker in (MGM)
Cantor Fitzgerald is a Market Maker in (MRVL)
Cantor Fitzgerald is a Market Maker in (MS)
Cantor Fitzgerald is a Market Maker in (SPWRA)
Cantor Fitzgerald is a Market Maker in (V)
Cantor Fitzgerald is a Market Maker in (VALE)
Cantor Fitzgerald is a Market Maker in (WYNN)
Cantor Fitzgerald is a Market Maker in (QQQQ)
Cantor Fitzgerald is a Market Maker in (SPY)

For Brian Kelly
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Owns (GLD)
Kanundrum Capital Owns (TLT)
Kanundrum Capital Owns (GFI)
Kanundrum Capital Owns (AUY)
Kanundrum Capital Is Short (XLK)
Kanundrum Capital Is Short (XLI)
Kanundrum Capital Is Short (XLF)
Kanundrum Capital Is Short (WYNN)
Kanundrum Capital Is Short (AA)
Kanundrum Capital Is Short (CAT)
Kanundrum Capital Is Short (EMN)
Kanundrum Capital Is Short (EXPE)
Kanundrum Capital Is Short (CME)
Kanundrum Capital Is Short (STT)
Kanundrum Capital Is Short (XLE)
Kanundrum Capital Is Short (SU)
Kanundrum Capital Is Short (IOC)
Kanundrum Capital Is Short (USO)
Kanundrum Capital Is Short Euro

For Anthony Scaramucci
Scaramucci Owns (BAC), Skybridge Owns (BAC)
Scaramucci Owns (C), Skybridge Owns (C)
Scaramucci Owns (GS), Skybridge Owns (GS)
Scaramucci Owns (HPQ), Skybridge Owns (HPQ)
Scaramucci Owns (JPM), Skybridge Owns (JPM)
Scaramucci Owns (WMT), Skybridge Owns (WMT)
Scaramucci Owns (BUD), Skybridge Owns (BUD)
Scaramucci Owns (INTC), Skybridge Owns (INTC)

For Dennis Gartman
Funds Managed By Dennis Gartman Are Short (GS)
Funds Managed By Dennis Gartman Own (MMM)
Funds Managed By Dennis Gartman Own Gold
Funds Managed By Dennis Gartman Are Short British Pound Sterling
Funds Managed By Dennis Gartman Are Short Euros
Funds Managed By Dennis Gartman Are Long Australian Dollars
Funds Managed By Dennis Gartman Are Long Canadian Dollars

For Jeff Harte
Sandler O'Neill Served As Financial Advisor To Investor Group That Agreed To Buy First Republic Bank From (BAC)
Sandler O'Neill Recvd. Inv. Bank. Comp. From (C), (JPM), (BAC) In Past 12 Mos.
(JPM), (BAC) Was An Investment Banking Client Of Sandler O'Neill In Past 12 Months
Sandler O'Neill Expects To Receive or Seek Inv. Bank. Comp. From (BAC), (BK), (JPM), (C), (NTRS) In Next 3 Mos.
(BAC), (C), (JPM), (MS), (BK), (NTRS) Are Clients Of Sandler O'Neill
Sandler O'Neill Has Received Non-Inv. Bank. Comp. From (C), (JPM), (BAC)

(GS) Is A Non-Inv. Bank. Client Of Sandler O'Neill
Sandler O'Neill Is A Market Maker In (NTRS)

Other Relevant Disclosures
Najarian Owned (VRSN) Calls On 5/18/10



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