Panic Hits Gold, and It’s Not Pretty

Yesterday, I talked about the seemingly key $125-ish level on GLD.

I wish I had the guts to get in short because this morning, GLD has slammed straight through $125 all the way to $121.86.

The ever-volatile gold miners (GDX) and junior miners (GDXJ) are dropping -7.5% and -8.4%, respectively.

This has a whiff of panic selling.

Earlier today,  the Fed's Lacker and Mester swung their mighty hawk hammers, which has traders chattering about coming rate hikes.

And of course, we have the big September NFP report on Friday, which comes on the heels of a decent rebound in US economic data.

Interestingly, gold is gapping down towards its interim bottom on June 24.

That of course was the date of the big Brexit surprise, featuring a monumental gap up in gold:

Gold options are also very active today.

GLD puts are trading at 7.4 times the normal volume for this time of day, according to Thinkorswim.

However, there appears to be some dip buyers poking around GDX, since call options are actually quite active in that ETF.

Precious metals have had a huge year.

Even with today's dip, GLD is still up 20.8% year-to-date and GDX is up 74.3%.

So I guess it makes sense that traders are rushing to lock in profits — or get short — ahead of the big jobs report Friday.

A huge beat could mean more downside, but either way, I think gold is officially the market's funnest battleground.