Listen to Jeff Reeves and I discuss gold’s recent meltdown and offer our ideas of what is behind it. If you cannot view the embedded audio player, please follow this link.
From The Slant:
Gold prices have fallen some 23% from a high above $1,800 last fall to a current low of around $1,380.
And it looks like that’s only the beginning.
Charles Sizemore of Sizemore Capital Management points out that a big-time hedge fund manager unwinding his position could be partially to blame for the declines — and thinks that until some of the big gold investors unwind their positions, it’s going to be dangerous to dabble in the precious metal.
That big-time investor is John Paulson, who is out $1.5 billion (on paper, of course) thanks to an aggressive bet on gold that went south.
This is a lesson is risk management that all traders should take to heart: When you bet big, things can get painful in a hurry if the market moves the other way.
