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The Bear Case
CNBC.com | March 12, 2012 | 11:25 AM EDT

SPDR Gold Trust, the largest ETF tracking gold through ownership of bullion, traded below its 200-day moving average for the first time in nearly two years in late December, which technicians often view as the start of a downtrend.

Since hitting an all-time high of $184 in early September when gold reached $1,900 an ounce, the gold trust has skittered down and sideways. Shares retreated to $156 in late September and hit a new low of $150 in late December.

Such action is a strongly bearish signal, says Adam Hewison of INO.com, a futures and foreign exchange data provider.

“It’s not a money making trade at these levels,” says Hewison, who sees gold dropping as low as $1,620 by the end of March. “When there’s no strong [buying] interest, the market falls on itself.” Natural gas prices are also taking it on the chin.

Production advancements could provide the U.S. with a 100-plus-year supply of natural gas. Such abundance foretells a long-term trough for prices — good for consumers but depressing for potential investors.

“Natural gas has plummeted, [because] we don’t have infrastructure to quickly take advantage of this abundant natural resource,’’ says Chris Brown, manager of the Pax World Balanced Fund.

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