Gold Weakness Signals Trouble for 2 Unexpected Stocks: Weiss

Gold traded lower again on Wednesday for the fourth straight session and briefly entered bear market territory last night after dropping below $1,538.96.

The precious metal has now fallen roughly 20 percent from its all time intraday high set on September 6th.

If you’re looking to trade the trend, pro trader Stephen Weiss suggests looking at the precious metal in a new way.

“Forget gold as a safe haven, gold is trading like a risk asset” he says. “That’s how you have to look at it.”

And Weiss says developments in China make gold that much riskier.

“China is the second largest consumer of gold and they just came out and said jewelry sales were terrible.”

Weiss takes it as a sign that the high end consumer in Asia is starting to crack.

“I’d extrapolate that to Tiffany and even Coach. When they report I think we hear China’s high-end consumer is not strong.”


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Posted by CNBC's Lee Brodie

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Trader disclosure: On May 16, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephen Weiss is long JPM; Stephen Weiss is long CSC; Stephen Weiss is long UUP; Stephen Weiss is short JCP; Stephen Weiss is short CMI; Stephen Weiss is short MT; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Josh Brown is long JPM; Josh Brown is long HD’ Josh Brown is long XBI

For Whitney Tilson
Whitney Tilson is long JCP with wires.