As Gold Price Dips, Short ETNs Let Skeptics Capitalize

March 24, 2008 at 1:00 pm by Tom Lydon

 

2683216168 Commodity
prices corrected after a lengthy rally driven by the Federal Reserve interest rate
cuts, sending exchange traded notes (ETNs) that short gold up 7% in two
days. DB Gold Double Short ETN (DZZ) gained 7% as of last Tuesday and Wednesday, as the shift in precious metals, oil and wheat occurred.

John Spence for MarketWatch reports
that gold prices fell after the Federal Reserve cut interest rates
again on Tuesday, by three-quarters of a percent to their lowest level since
2004.

What’s in store for this week? We’re in volatile times, and anything goes. Gold exchange traded funds (ETFs), such as streetTRACKS Gold Shares (GLD) and iShares COMEX Gold Trust (IAU), are up slightly so far today.

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    • Tom Lydon: Terry, Yes, this strategy can be applied to any type of ETF. Just be aware of the heightened volatility in...
    • Isis: I think that this is wow.
    • Terry: Great article! Does the same trend strategy apply to the ETFs that short the market or sectors, such as SH?...
    • Tom Lydon: PC, you can find the answer to your question in a post we wrote based on it:...
    • Bill Hungate: Tom, what about the short ETF’s in a Bear market such as this? Is there any reason we...

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