“Gold was a very over-owned and a very big bull market and when it broke support, the masses got out,” Gary Kaltbaum, president of Kaltbaum Capital Management, said in the article. “When the big money guys own a boatload of stuff, and are all watching the same number, when support breaks, I call it the ‘give up, we are done’ response.”
Along with the inverse gold ETF, there are a number of inverse gold-related exchange traded note products. However, traders should be aware that an ETN is essentially an uncollateralized loan to an investment bank and leaves investors open to potential credit risks of the issuing bank – if the bank goes under, there is no guarantee that the ETN investor will receive all of his or her principle back. [Exchange Traded Notes]
Inverse ETN options include:
- PowerShares DB Gold Double Short ETN (NYSEArca: DZZ). DZZ tries to generate the twice inverse, or -200%, return of the daily performance of the DBIQ Optimum Yield Gold Index. The ETN is up 24.6% year-to-date.
- PowerShares DB Gold Short ETN (NYSEArca: DGZ). DGZ tries to reflect the inverse of gold price movements by taking a short position in the underlying DBIZ Optimum Yield Gold Index. The ETN is up 11.9% year-to-date.
- VelocityShares 3x Inverse Gold ETN (NYSEArca: DGLD). DGLD tries to reflect the performance of three times the inverse, or -300%, daily performance of the S&P GSCI Gold Index. The ETN is up 38.2% year-to-date.
ProShares UltraShort Gold
For more information on gold, visit our gold category.
Max Chen contributed to this article.