Today (Thursday), gold fell to its lowest level since January. There are three reasons why today's gold price is going down...
spot gold price
At the time it seemed like investors, traders and even the guy at the corner store were all buying, hoarding, and lusting for gold.
But the stellar gains were short lived, and by the end of the year gold prices had fallen by nearly 20%.
Part of the striking decline in gold was due to the fact that the "smart" money that had once been amongst gold's biggest cheerleaders, sold it.
Some booked profits, some sold it to reflect gains in portfolios, others were forced to sell to meet margin requirements, and others wanted to start the New Year with a clean slate.
Gold Prices in 2012Enter 2012, and gold prices enjoyed a lustrous January, rising some 10%, helped in particular by Chinese New Year celebrations.
Gold has since languished as investors became more willing to take on added risk, delving more into equities. While gold prices foundered, the Dow rose 8% in the first quarter, the S&P 500 gained 12%, and the Nasdaq enjoyed a nearly 19% gain.
And more recently, not even gold's best friend, Federal Reserve Chairman Ben Bernanke, offered up much help.
Following the commencement of the two-day FOMC meeting last week, gold experienced a volatile day, but managed to end virtually flat from the previous trading session. The Fed left interest rates steady and extinguished hopes for immediate further monetary loosening measures.
Without a promise of more quantitative easing, long gold holders headed for the exits.
Nonetheless, many sophisticated gold traders are poised to pounce on gold with every dip.
Among them is the storied and accomplished commodities investor Jim Rogers.
Now, we don't advise jumping off the gold bull's back just yet - especially since Money Morning's leading gurus see a gold price climb to $5,000 possible over the long haul. But you may want to consider taking out a little short-term "insurance" on your precious metals profits.
In fact, we suggested readers do just that in the Aug. 22 issue of Money Morning Private Briefing. We even went a step further and issued step-by-step instructions for a gold-hedging strategy.
Just two days later, on Aug. 24, gold suffered its third-worst down day in history, plunging 5.6%.
Readers who took our advice reaped windfall profits as a result. And now we're giving you the same opportunity.
We're back today with another strategy to help "insure" your gold profits.
The Secret Way to Hedge GoldThe only thing you need to do to hedge gold is follow this simple options strategy.