Gold ETFs: The 200-Day Says It All
December 15th at 12:00pm by Tom Lydon
Gold exchange traded funds (ETFs) are in the middle of a broader sell-off in gold today. The primary culprit seems to be profit-taking, with a dash of bubble fears mixed in for good measure.
It’s only natural. If you currently own a gold fund like SPDR Gold Shares (NYSEArca: GLD) – pictured in the chart below – you’ll wonder if it’s time to sell when the prices reach these levels. If you don’t own a gold ETF, you’re likely wondering if it’s time to buy.
Proclamations that gold may be in a bubble add fuel to the fire of uncertainty. Even famed commodities investor Jim Rogers has weighed in, stating that he believes gold prices will hit $2,000 an ounce but he’s done buying it, according to the Globe & Mail.
Not everyone is on board. Goldman Sachs thinks gold’s top will come in at $1,750 an ounce in 2012, while Kitco.com predicts a top will be reached in 2011. [Commodity ETFs: Are They Too Popular?]
With varying opinions like that, it’s tough to know which direction to move. If you want to play gold, you don’t have to miss out. GLD, iShares COMEX Gold (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) are all well above their long-term trend lines. [Physical Gold ETFs Go Head-to-Head.]
By having a simple strategy like trend following, you can participate in the upside, while the sell point will give you protection from declines.
