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.
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.