Gold In Freefall

by on August 24, 2011 | ETFs Mentioned:

Equity markets got off to a stronger than expected start this week as investors refrained from selling, and instead stepped in to buy up stocks on the cheap and push domestic indexes higher off last week’s lows. Wall Street rallied on Wednesday after a positive durable goods report boosted investor’s sentiment as orders rose by 4% in the month of July, however, without the transportation component, U.S. orders increased by a mere 0.7% for the month. “Dig a little deeper into the data and the orders picture looks less reassuring and could be signaling a coming slowdown in business investment,” economists at Wells Fargo wrote. Gold surged to $1,917 an ounce towards the end of trading on Monday, yet, the precious metal encountered some serious profit taking the following day and managed to shed as much as $100 on Wednesday alone, closing near $1,750 an ounce.

Checking In: Trading Ideas

This week, our trading ideas included a long position in a U.S. Treasury bond fund and an emerging market ETF, as well as a short position in the high-yield corner of the domestic fixed-income market. Stocks have been holding up much stronger than expected so far this week, putting our defensive-minded recommendations in less than favorable positions.

Trading Idea #1: Long THD

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