“Normally a big drop in gold prices will send gold ETF investors heading for the sidelines, but there was nary a reaction to that big drop,” according to the McClellan Market Report. “In fact, total assets in GLD and IAU, the two biggest gold bullion ETFs, actually rose slightly that day, and have continued upward in the days since then. It is as if investors viewed that sell-off as more of a buying opportunity than a reason for worry.”
Investors with a bearish outlook on gold can also use ETFs to profit from declines or hedge. Inverse ETFs that short gold include ProShares UltraShort Gold (NYSEArca: GLL), PowerShares DB Gold Double Short ETN (NYSEArca: DZZ), PowerShares DB Gold Short ETN (NYSEArca: DGZ) and VelocityShares 3X Inverse Gold ETN (NYSEArca: DGLD). Some of the funds use leverage, which means more volatility.
ETFS Physical Swiss Gold Shares (NYSEArca: SGOL)
Full disclosure: Tom Lydon’s clients own GLD.