Talking Numbers - CNBC | Yahoo Finance

Sponsored by
Talking Numbers

This gold chart is ugly: expert

Talking Numbers

Gold prices tank Friday after a massive sell-off. With a US budget deal expected soon, is this a sign of things to come for gold?

One large sell order sent gold spiraling down 2.5% at the New York market open. But, is this the first of many of such sell orders?

The yellow metal plunged from $1,285 per ounce to $1267 at the New York market opened when an order for 5,000 futures contracts (500,000 ounces, nearly $640 million worth) placed at New York Mercantile Exchange. According to market data company Nanex, a portion of that order – 2,700 contracts – triggered stops, forcing a 10-second halt in trading. After the halt was lifted, the remaining 2,300 contracts were traded.

(Watch: Gold’s plunge blamed on one massive sell order)

This also traded through the key technical support level of $1,300, breaking the neckline of a head and shoulders pattern which began in July. [Watch the Talking Numbers tutorial on head and shoulders patterns here.]

This comes as optimism spread that a compromise may be reached allowing the US government to pay its debt on time. Gold is now down 4% for the week.

Gold is also down 7% from its September 19 highs. That's when the Federal Reserve Bank told the markets it would continue its $85 billion per month bond-buying policy which has been adding dollars into the financial system and lowering interest rates. Even before Friday's fall, gold was trending downward despite the traditional use of gold as an inflation hedge.

Gold investors are not having a good 2013. Since January, the metal is down over 24%. Meanwhile, the S&P 500 index is up 19%.

(Read: Gold at 3-month low, eyes 2nd weekly loss on US wrangling)

So, is this recent sell a harbinger of things to come in gold?

In the video above, two analysts take on gold's next move. Looking at gold's fundamentals is Zachary Karabell, president of River Twice Research. Charting the gold ETF (the GLD) is Andrew Busch, author and publisher of The Busch Update.

What can we expect from gold? Watch the Talking Numbers video above to see what fundamentals' and technicals' take on the metal.

More from Talking Numbers:

Why healthier food may be bad for your portfolio
Why the top could be in for Facebook
Short-seller Chanos: ‘I’m long Apple’

________________

Follow us on Twitter: @CNBCNumbers
Like us on Facebook: facebook.com/CNBCNumbers

Rates

View Comments (12)

Recommended for You

  • China's rich pimp their planes as jet market takes off

    Shanghai (AFP) - When a Chinese customer asked for the interior of his new Bombardier Challenger 850 jet to be covered with pricey black carbon fibre, the designer was shocked -- but happy to oblige.

    AFP
  • Obama admin. says health subsidies will continue

    WASHINGTON (AP) — A federal appeals court delivered a potentially serious setback to President Barack Obama's health care law Tuesday, imperiling billions of dollars in subsidies for many low- and middle-income people who bought policies.

    Associated Press
  • What a Marijuana ETF Would Look Like

    The changes taking place around marijuana for medical use and for recreational use are the biggest in almost everyone’s lifetime. There are quite literally billions of dollars up for grabs for those who ...

    24/7 Wall St.
  • CEO: Rivers to quit Clippers if Sterling stays

    LOS ANGELES (AP) — The interim CEO of the Los Angeles Clippers testified Tuesday that coach Doc Rivers told him he will quit if Donald Sterling remains the owner of the team.

    Associated Press
  • U.S. housing turning the corner, inflation creeping up

    By Lucia Mutikani WASHINGTON (Reuters) - U.S. home resales hit an eight month-high in June, suggesting the housing market was gradually regaining momentum and would help the economy to stay on a higher growth path this year. The third straight month of home sales gains, reported by the National…

    Reuters
  • We Paid Off $90K of Debt in 4 Years

    One couple went into debt to give their son the education that he needed, eventually owing nearly $90K on credit cards. Here's how they paid it off.

    Credit.com
  • Play

    How to Build Your Own Annuity

    Instead of paying an insurance company, financial advisor Allan Roth recommends building your own "indexed annuity" that protects principal while giving market upside.

    WSJ Live
  • Portfolio Analysis: A Cost-Efficient $353,000 Retirement Plan

    My latest portfolio report card is for Mary in Santee, California. She self-manages a 401(k) retirement plan with $353,000 scattered across seven mutual funds and company stock. Before I assign her investment portfolio a final grade, let's examine Mary's portfolio. Still, her retirement plan misses…

    U.S.News & World Report LP
  • China food scandal spreads, drags in Starbucks, Burger King and McNuggets in Japan

    By Adam Jourdan SHANGHAI (Reuters) - The latest food scandal in China is spreading fast, dragging in U.S. coffee chain Starbucks, Burger King Worldwide Inc and others, as well as McDonald's products as far away as Japan. McDonald's Corp and KFC's parent Yum Brands Inc apologized to Chinese…

    Reuters
  • New India government urges changes to World Bank

    India's new government has called for reforms to the World Bank structure to reflect the "emerging" clout of developing nations in a meeting with visiting bank chief Jim Yong Kim. The government, which took office in May, said in a statement late Tuesday that Finance Minister Arun Jaitley stressed…

    AFP
  • Detroit retirees back pension cuts by a landslide

    DETROIT (AP) — A year after filing for bankruptcy, Detroit is building momentum to get out, especially after workers and retirees voted in favor of major pension changes just a few weeks before a judge holds a crucial trial that could end the largest public filing in U.S. history.

    Associated Press
  • Goldman Sachs: Here Are 25 Small-Cap Stocks to Buy

    While Goldman Sachs is cautious on small-cap stocks due to valuation concerns, the firm still finds some pockets of opportunity among individual names within the group.

    The Wall Street Journal
  • Herbalife Plummets

    Herbalife shares were down as much as 11%...

    Business Insider
  • Airlines ban flights to Israel after rocket strike

    JERUSALEM (AP) — A Hamas rocket exploded Tuesday near Israel's main airport, prompting a ban on flights from the U.S. and many from Europe and Canada as aviation authorities responded to the shock of seeing a civilian jetliner shot down over Ukraine.

    Associated Press
  • Play

    U.S. Stocks Open Lower

    U.S. stocks kicked off the week in a decline, as investors paused following last week's run to record highs. MarketWatch's Victor Reklaitis joins Paul Vigna on the News Hub with the details, plus which stocks to keep an eye on. Photo: Getty

    WSJ Live
  • Microsoft CEO, Seeking Growth, Tells Managers to Step It Up

    The day Satya Nadella became Microsoft Corp.'s chief executive officer, he invited several dozen vice presidents to breakfast and had a simple, calm admonition for them: "Can you step it up?" The engineer's tone was a departure from the yelling and wild gesticulations favored by his salesman…

    Bloomberg
  • Beef pollutes more than pork, poultry, study says

    WASHINGTON (AP) — Raising beef for the American dinner table does far more damage to the environment than producing pork, poultry, eggs or dairy, a new study says.

    Associated Press
  • JetBlue pilot among 6 arrested in Boston drug bust

    BOSTON (AP) — A JetBlue pilot from Florida is among six people arrested by Boston police over the weekend in an investigation of drug dealing incidents near the Boston Common.

    Associated Press
  • Top Analyst Upgrades and Downgrades: Apple, ARM, DaVita, GE, GoPro, Itron and Many More

    These are the top analyst upgrades, downgrades and initiations from Wall Street firms on Monday, July 21, 2014. They include Apple, ARM Holdings, DaVita Healthcare, General Electric, GoPro and Itron.

    24/7 Wall St.
  • Rebels release train with bodies from downed jet

    HRABOVE, Ukraine (AP) — Bowing to international pressure, pro-Moscow separatists released a train packed with bodies and handed over the black boxes from the downed Malaysia Airlines plane, four days after it plunged into rebel-held eastern Ukraine.

    Associated Press