Gold ETFs Look for Next Move

October 5th at 6:00am by Tom Lydon

Although physically-backed gold exchange traded funds (ETFs) are raking in assets and making gains left and right, many are beginning to wonder where the top is for this metal’s meteoric rise.

Last week, gold hit its 10th record high in the past 12 trading days, rising above $1,310 an ounce in New York. A BlackRock executive that manages the iShares fund claims that the gold ETFs have more room to grow. Reuters on Fox Business reports that short-term risks within the economy and the safe haven status of gold are attracting investors to the metal.

Others seem to feel similarly: gold could go higher. Commodity guru Jim Rogers, for example, says he feels that gold could go as high as $2,000 in the next five to 10 years. [U.S. Dollar Trips, Gold ETFs Make Gains.]

Marc Perton for The Consumerist reports that Abu Dhabi now has ATM machines that dispense gold bars rather than money. You can just drop in to the Emirates Palace hotel, pop a few bills into the ATM and walk out with gold bars. The machine, Gold To Go, monitors gold prices and automatically updates its pricing every 10 minutes. [Is It Time To Short Gold With ETFs?]

Remember that gold can still weaken for the time being, so mind the trend line and have a plan; either be ready to short gold or use your strategy for getting out before the bubble bursts.

When investors don’t have a plan for getting in and out of the market, the tendency is to defer to their emotions and “gut feelings.” If you’ve been burned by your emotions in the past, you know this. This is why we suggest a simple strategy for buying and selling. The one we use is trend following, which relies on the 200-day moving average as a signal.

  • SPDR Gold Shares (NYSEArca: GLD)
  • ETFS Physical Gold Shares (NYSEArca: SGOL)
  • ProShares Ultra Short Gold ETF (NYSEArca: GLL)

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.