$1656. The dollar price per troy ounce of gold. That's an almost $300 discount from the all-time record set only a few weeks ago. I was expecting this pullback for a while for various reasons, but late today we found out the main driver behind the move. CME just hiked the margin requirement for gold by 21%! In other words an investment bank like Goldman Sachs has to put up 21% more capital to buy gold on margin than they did a week ago. This is what has spurred the massive amount of institutional selling the last 48 hours. This doesn't mean gold will now reverse and head back up to $1900. All the hedge funds and institutions that sold the gold aren't just going to go back and buy gold again. My guess is they're waiting for good news out of the Euro Zone so they can buy stocks. Stocks are by far the most oversold asset class in the world, and believe me, that's where the big boys are looking to put their cash. I think gold can fall another $100 dollars or so, but if you've been short since $1900 like me, it's time to start taking profits.
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