Gold Drops Most In 30 Years

Tyler Durden's picture

Previously, levered hedge funds were forced to sell gold on stock margin calls. How long until today's gold plunge, the largest 2-day drop in the past 30 years, forces funds to start selling stocks to meet margin clerks vocal demands some time around 2pm today?

John Bougearel of Structural Logic chimes in:

Today is the largest one day decline from the previous day's close @ -9.6%. Volume is already north of 530,000 - another record with another 6 hours of electronic trade to go.   There have been three rounds of liquidations. The first round was the Asian liquidation that ended at 9 am. The second round was the European liquidation that ended at 5 am. They are spaced 8 hours apart. At this rate, the US liquidation phase won't be complete until the London closing at 1230 pm CST, at least this is what that behavioral model suggests. You are witnessing an historical selling climax folks.      

 

 

and the RSI shows gold to be the most oversold in 31 years...

 

as Gold pushes down to the 50% retracement of the 2008-2012 swing low-to-high...

 

and the S&P in Gold terms broke 2009 resistance (and perhaps explains more of the technical surge)...

 

Charts: Bloomberg