Anatomy of a Record Slump

Gold's getting clobbered again. The yellow metal lost a cool $50 overnight, dropping to a low of $1,223. Wednesday, June 26th, 2013     Anatomy of a Record Slump   Gold's not-so-quiet week gets worse Another leg lower. Next stop $1,000… Plus: Why data doesn't matter…   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner It's a quiet morning. Stateside, stocks continue to slowly melt higher after Monday morning's big selloff. The Shanghai Composite is barely in the red today after a week of credit-crunch turmoil. European shares are higher. So far, it feels like an average day—the first time a meltdown in some corner of the world isn't affecting our markets. That is, if we completely ignore what's happening with precious metals right now. You guessed it: gold's getting clobbered again. The yellow metal lost a cool $50 overnight, dropping to a low of $1,223. For the record, this chart uses data from yesterday's close. Last night's action isn't reflected. Gold is actually down more than 25% year-to-date. That's bad, but not nearly as bad as spot silver, which has coughed up 40% since Jan. 1. I'll give the serious journalists one more crack at it before wrapping this up: "Prices could slide further," Reuters reports, "some investors saying below $1,000 per ounce - while there is little potential for data, market trends or economic developments in the United States or Europe to reverse an accelerating investor move out of gold." Finally…someone is catching on. Gold has telegraphed every step lower so far this year. If you've paid any attention at all, the breakdowns have been nothing short of obvious. And all it took was gold's worst loss on record for some folks to snap out of it (yes, it's that bad. In fact, the slide is the biggest quarterly loss since Reuters started tracking the data in 1968.). So there you have it. The carnage can now officially take its place in the history books… Meanwhile, my take on precious metals remains the same. This latest drop is just another leg on gold's ride to $1,100 - $1,000. Now's not the time to begin looking for a move higher. The path of least resistance is lower. We have a ways to go before thinking about a meaningful rally—let alone stability.     Rude Numbers Targets, Predictions and Wild Guesses   $18.65 is where you'll find silver futures this morning. That's a 5% drop from yesterday afternoon… 135 points dropped from the Nikkei— a relatively boring trading day for volatile Japan. The index closed off just 1%. Meanwhile… 1,587 is where you'll find S&P futures just before the bell. American stocks continue to creep higher after Monday's swoon. 5 million clips were uploaded within the first 24 hours of the release of Instagram's new video tool. Instagram now expects to monetize its 130 million users within a year… $231 billion marks the durable goods orders just from May. This 3.6% gain signals a possible stabilization in manufacturing…     Rude Trends When to Buy... When to Sell   Upbeat data is raising investor hopes this week. S&P/Case-Shiller reported yesterday that home prices were up 2.5% in April. That's the biggest monthly increase ever. Durable goods orders (which I mentioned above) also came in above expectations. Sure, the data is solid. And of course, the financial media told us that the positive numbers were what caused the market to rise yesterday. But in reality, these numbers mattered very little to the markets. Consider the action we saw earlier this year. We had many days where bad data hit the wire, only to see stocks melt higher. Trend and sentiment were more important at the time than the soft numbers. Now, with the market trading in no man's land, volatility has become a factor. Of course, investors want to assign a specific reason for every move. But in reality, a lot of it is just noise. We have longs and shorts jockeying for position this week. Don't get too caught up in the back-and-forth reactions. Only big Fed/taper news will rattle the masses. Everything else is secondary… [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]     Ignore At Your Own Peril Today's Must Read Links   A near-death experience to profit from Is Obama Terrified of the "Secret $200 Retirement Blueprint? 47 Ways to profit from a Shrinking Dollar…     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary:         To end The Daily Reckoning's Rude Awakening e-mail subscription and associated external offers sent from The Daily Reckoning and The Rude Awakening, click here to unsubscribe. 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