Morning Note: Gold to Lose Its Shine Next Year
Is the shine off of gold? Fast Money Trader Joe Terranova thinks so. This morning, he was watching for more weakness in the yellow metal as gold bugs and bulls reduce their position before the New Year. “I continue to play gold from the short side,” said Virtus’ Chief Market Strategist. “I think the pressure is going to be on gold.”
Gold was one of 2010’s best performing assets. Fears of European sovereign debt and dollar weakness have led investors to buy gold in hopes that it will retain its value better than paper currencies. Gold soared to a record of $1,430 an ounce on Dec. 7 as retail investors followed the likes of John Paulson into gold ETFs.
But the star of 2010 may not continue to be the trade of 2011, cautioned Terranova.
Gold investors appeared to be listening. Gold futures were lower in early trading.
Kanundrum Capital’s Brian Kelly, meanwhile, was watching Nucor . The company warned today that it expected a fourth-quarter loss of $0.10 to $0.15 due to increases in scrap metal prices. Nucor was down more than 1 percent in early trading.
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