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This just isn't working out the way it's supposed to.
When countries cut interest rates and inject monetary stimulus, it's supposed to give gold a boost. But the yellow metal has just finished its worst week in months.
Todd Gordon, founder of TradingAnalysis.com, just exited a gold position he has held since last April. "It seems like with central banks puming in so much liquidity, I think the precious metals markets are starting to kind of discount liquidity withdrawal and these precious metals are selling off," he told CNBC's Melissa Lee.
The current low level of inflation is also weighing on gold, says Kathy Lien, a managing director at BK Asset Management.
"Inflation is not going to skyrocket. It's going to happen slowly," she says. "If that happens, you don't need to have an inflation hedge on."
Gold Gets Gutted
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So rather than gold, Brian Kelly of Shelter Harbor Capital is eyeing a currency he's calling the new gold: the New Zealand dollar. New Zealand is not participating in whatever currency wars are taking place, and he expects that to keep the currency relatively strong.
"New Zealand can't do anything about devaluing their currency," he says. "It's a small enough market where you can get a lot of people running towards the door" if there is a currency-denting stimulus move.
Kelly likes the kiwi against the dollar, but he likes it even better against the yen.He wants to buy the New Zealand dollar against the yen at 79.20, setting a stop at 78.20 and a target of 83.00.
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The price of gold is tumbling even as countries cut interest rates and inject monetary stimulus, and this strategist has a way to play the move using currencies.
Source: http://www.cnbc.com/id/100465125
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