Gold ETFs: To Hug A Gold Bug (GLD, IAU, DGL, UGL, GLL)

One of the first rules of investing is to not chase performance. Gold prices on average have risen every year since recording $271.04 for 2001.   Gold prices are currently are around $1,236/oz. One of the hardest tasks for investors is to move beyond the roar of the crowd and execute investment decisions that go against general consensus even if all reasonable notes suggest the crowd is right.  The following will give readers tools to use whether they are in the “it will go higher” or the “fall back to earth” camp concerning future gold prices.

The following bullets are notes taken from Federal Reserve Chairman Ben Bernanke’s August 27th speech at the Kansas City Economic Symposium.  Economic Outlook and Monetary Policy.

Reasons why Gold’s Run could continue

  • Global economic recovery is incomplete
  • Bank Credit Remains Tight
  • Unemployment is still high
  • Management of fiscal debt and fiscal deficits persists
  • Imbalances in global trade continue
Gold Bugs, 
ETF Daily News Article Category Search:
  • SPDR Gold Shares (NYSE:GLD)  Visit Our (GLD) Category: HERE
  • iShares COMEX Gold Trust (NYSE:IAU)  Visit Our (IAU) Category: HERE
  • PowerShares DB Gold (NYSE:DGL)  Visit Our (DGL) Category: HERE
  • Proshares Ultra Gold (NYSE:UGL)  Visit Our (UGL) Category: HERE
  • ProShares UltraShort Gold (NYSE:GLL)  Visit Our (GLL) Category: HERE

What’s Missing to Repair the U.S. Economy?

  • Growth in private final demand
  • Consumer spending
  • Business fixed investment
  • Strength in residential and nonresidential construction

Reasons why Gold’s Run could be near its end

  • Gold prices are at historic highs
  • Late comers hoping for higher gold prices could be too late
  • U.S. Households have been improving their balance sheets by paying off debt
  • Inflation is expected to remain subdued for sometime
  • The Federal Reserve is committed to supporting the economic recovery with the tools it has at its disposal

Famous Money Managers Who Went Their Own Way

George Soros bet against the British Pound, John Paulson bet against subprime bonds and the investors who bet against the unending ascension of Gold prices could be on the right side of a rarely mentioned trading position.  It will also be worthwhile to keep an eye on the money flows into and out of the ETFs mentioned above as a barometer of investor sentiment.  Hugging a Gold bug is easy since the commodity is so attractive right now, but it’s the bear hug of a pull back that has my attention.

 Written By Gregory S. Davis From ETF Ready

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