Gold has definitely been in the news as of late as it continues to make new highs. I have been watching Gold from the sidelines as it now hovers around $1,330/oz. At one point it went up to a crazy $1,370 .oz. I remember a time when the financial news media went crazy when gold crossed the $1,000 mark. I’m still bullish on the shiny stuff due to the continuous money printing and the never ending debt problem. But, despite that, if there is one thing I have learned from researching commodities and commodity ETFs is that it’s never a great time to buy something while it is near its all time highs or when something is making all time highs.
It might not be the most exciting thing around but I have found that most successful investors sit around and do nothing until the odds are hugely in their favor. In the past week or so, I have seen several financial commentators call Gold a bubble, among them is financial guru George Soros. I do not know whether we are in a bubble or not, but when I have strangers knocking on my door around the clock willing to fork out hundreds of dollars for my beat up gold, something is up and its a sign to run for the hills.
Best Gold ETF
As you can imagine, there a handful of Gold ETFs to choose from. Gold in general is one of the most sought after commodity and arguably the most well known commodity known by the general public. Personally, I am a big fan of the SPDR Gold Trust (GLD). With assets $56.1 billion, it has become the largest ETF in the world, and if Gold continues the way it has performed recently, it should start to pull away from the pack. The large size also allows for it to be very liquid and move in and out of a position without any issues. There are leveraged gold ETFs such as:
- ProShares Ultra Gold (UGL)
- ProShares UltraShort Gold (GLL)
But, at current levels, using a leveraged gold ETF is playing with fire in my opinion. Gold might be considered to be in a bubble stage and with bubbles I have found that people become very rich or very poor. It’s definitely not my type of trade, as I’m confident opportunities always exists in any kind of market as long you keep on searching.
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November 3, 2010
Commodity ETFs