Gold Is Tumbling On Expectations Of Rising Interest Rates, Lowest Levels Since June

Gold continued its extremely volatile decline on Friday as the SPDR Gold Trust (ETF) GLD plummeted for the fifth consecutive trading session to its lowest level since June. The selling pressure was compounded by a massive dump of more than 85,000 futures contracts representing more than $10 billion on Friday morning.

Gold’s week-long losing streak now has the GLD down 5.4 percent and the Market Vectors Gold Miners ETF GDX down 13.2 percent.

Levered gold ETFs Direxion Shares Exchange Traded Fund Trust NUGT and Direxion Shares Exhcange Traded Fund Trust JNUG are down 36.7 percent and 42 percent, respectively, in the past week. Both ETFs have lost over 70 percent of their values in the past three months.

At the same time, levered gold inverse ETFs Direxion Shares Exchange Traded Fund Trust DUST and Direxion Shares Exchange Traded Fund Trust JDST are soaring in the past week, up 44.2 percent and 55.3 percent, respectively.

Much of the bearishness on gold seems to be stemming from an increasing likelihood of Federal Reserve rate hikes starting as soon as December. A Reuters poll of economists conducted after the surprise election of Donald Trump found that 85 percent of economists still expect the Fed will proceed with a rate hike in December.

The New York Times reports that bond market traders are anticipating that Trump will usher in an era of higher inflation and higher interest rates.