Are gold bullion securities
good stocks to invest in ?
How to trade gold etfs like GLD etf
or ishares etf IAU
Gold bullion securities are one of recent additions to popular group of commodity exchange traded funds. Trading commodities and precious metals especially has been quite popular in last years. Investors pushed price of gold etfs like gld etf up as they have been afraid of debasement of USD as major world currency.
What are gold bullion securities ?
This is first European gold ETF/ETC that was created in 2003. This commodity ETF is designed to offer investors a simple, cost-efficient and secure way to access the physical gold market. GBS is intended to provide investors with a return equivalent to movements in the gold spot price less fees. Ticker for Gold Bullion Securities is GBS and these shares are traded on London Stock exchange. There are also further commodity exchange traded funds that allow to track and participate on prices of real gold metal. There are ETFS Physical Gold with symbol PHAU or ETFS Physical Swiss Gold with ticker SGBS, both traded on London stock exchange. What is their major difference from other gold related commodity exchange traded funds ? Well these ETFs mentioned above are backed by holding of real physical metal in secure vaults. It could be positive information if this etf is used for long term holdings by some investor. This advantage is not so big if you have plan to be more active investor or trader with gold related exchange traded funds.
How to trade gold etfs and other
commodity exchange traded funds
There are several different strategies that can be used for trading of gold etfs. They can be based on fundamental analysis , technical analysis or combination of both. I will let fundamental analysis to you and now I would like to discuss more technical aspects of possible gold etf trading strategies.First important issue that should be resolved is selection of best gold etf for trading. You can use gold bullion securities or other gold etfs backed by real gold holdings. Another option is to use another popular gold
commodity exchange traded funds
like GLD ETF or ishares ETF IAU that tracks gold futures on commodity futures exchanges in USA. Although some traders prefer to trade also some
gold stocks
of gold mining companies. Now I would like to describe several aspects that should be used for any technically based trading strategy for gold etfs.
Check bigger picture
There is always good to check bigger picture. What is current situation with gold ? Is it in some
long term up trend ?
What is current
short term trend?
And what is general situation on precious metals market ? And finally what is opinion of investors about commodities ? These questions should be answered before any gold investment decision. Although decade since year 2000 is very bullish for commodities, this is not common situation. There were periods when commodities were in
bear trend.
How to check global commodity situation ? Use this broad commodity ETF with symbol DBC.
It is also good to check what is opinion of investors about precious metals as commodity sub-group. It is possible to use DBP as related commodity exchange traded fund
And finally it is time for stock chart reading of some gold ETF like GLD ETF or above mentioned physically backed commodity exchange traded funds.
Decide what is best etf trading strategy
Now trader or investor should do further steps based on stock chart reading of above mentioned charts. Major decision should be made what
type of strategy
could be best for actual situation. This decision is based also on
type of stock trading
that is applied by every individual investor or trader.It should be decided if we are going to prefer bullish ETF trading strategy or bearish etf trading strategy. It is quite easy to buy these gold etf shares and
best stock brokers
also offer easy possibility to
sell short
these gold etfs. So it is really no problem to participate on bullish or bearish trends in these gold etfs. Next it is possible to go to more details and check if it is possible to find some etf trading strategy setup or if gold etfs should be monitored more to wait for more compelling setup with best risk reward parameters.
Return from gold bullion securities back to Commodity ETFs
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