Gold Bugs

People say gold is a good hedge against inflation. For me, gold is just another commodity that is subjected to speculation. It is no different to crude oil, silver or wheat.

The current theme play in the world market is against the USD. As the government prints more money to rescue their banking system, demand vs supply law says that the USD value will drop. The last time USD drop, every commodity that can be traded rose. The chart evidence shows that USD is dropping again. Well, you all know that the crude oil is now above USD60.00.

So, if you like to play gold, I think that the odds favors it to go to USD1,000.00 again. Gold has tried twice to break above USD1,000.00 but not successful (see the attached 30-year gold chart). If it is not successful this 3rd time, gold may drop to USD700.00 again.

If you want to invest in gold, you can do through the following ETF in the US: IAU(USD92.29) and GLD(USD92.25).

For me, I will buy the ETN: DGP(USD20.41). DGP is designed to return 2x the performance (up or down) of gold. Remember,ETN is like ETF but more risky. Stop loss for DGP is USD17.50.