Despite the sell-off from peak levels reached in August and September of this year and news that well known hedge fund managers including John Paulson have been paring back their exposure to the metal, exchange traded funds that track the price of gold bullion remain the best performers year to date (long only, unleveraged) in the commodity space (up roughly 20% YTD).
From a technical standpoint, after consolidating for much of September, and rising again in October only to fall back in recent weeks, it appears that gold ETFs may be poised for additional upside from current levels. [Gold ETFs Rise on Central Bank Liquidity Measures]
GLD (SPDR Gold Trust), IAU (iShares Gold Trust) and SGOL (ETFS Gold Trust) are three prominent ETFs in the space that own gold bullion, and all have recently found support at their 50 day moving averages.
Other notable funds in the “long” gold category are DGL (PowerShares DB Gold) and AGOL (ETFS Physical Asian Gold), and there are now a bevy of ways to play gold prices from both the long and short side from a trading or hedging perspective.
For those looking for short term breakouts, DGP (PowerShares Gold Double Long ETN), UGL (ProShares Ultra Gold) and UGLD (VelocityShares 3X Long Gold ETN) likely will have appeal, and conversely on the short side, funds of choice include DZZ (PowerShares DB Gold Double Short ETN), GLL (ProShares UltraShort Gold) and DGLD (VelocityShares 3X Inverse Gold ETN).
We would not be surprised to see heightened activity among gold ETFs going into this final month of the year due to potential tax related swap activity and substitution from one ETF/ETN to another, as well as being possibly related to any year end “marking” is concerned as fund managers tend to pile on their winning positions (and gold is up 20% YTD) going into the final days on the trading calendar.
iShares Gold Trust
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