Ah ... So That Explains Today's Price Action in Gold

Something I heard this morning, and it was just confirmed (as much as these things can ever be confirmed) by an article on RealMoney.com ...

Reports of the liquidation of a large hedge-fund position in gold contributed to sending futures on the safe-haven metal sharply lower -- despite what for all intents and purposes would seem like a great market for fearful investors to seek solace in a hard, scarce asset. Shares in gold producers are trading sharply lower today, as option traders position with corresponding bearishness.

XX -- here's my take.

I'm using a weekly chart because daily charts are unreliable in such a volatile market. Anyway, with today's breakdown, gold will likely head down to that line I've marked "1st Uptrend." Beyond that, next support is at 738.90

Driving that move lower? Probably liquidation from hedge funds, who will have to sell once their stops are hit.

The good news is this short-term selling will bring us down to great buying opportunities, the better to ride the longer-term uptrend, as I explained in my new gold report.

Check out my new gold and energy blog at MoneyAndMarkets.com