Today, during the last few minutes of the trading session I took some volatility and exposure off the table for clients in gold.Some clients owned Anglogold Ashanti (AU), some own the gold ETF (GLD). I started buying AU several years ago for gold exposure. As it moved higher, I bought it only for more aggressive clients. Over the last six months it has dramatically outperformed GLD. It feels like gold may have topped out, for now or forever, you can take your pick. If gold falls back to $480 I am afraid that I would give back all of the advantage I picked up with AU. After the great run gold has had, I think this is a good time to remove beta and reduce exposure.
I sold AU around $58.40 and bought the exact same share amount of GLD around $54.80. The net reduction in dollars exposed was about 6%. It is a little tougher to dig up exact volatility numbers right now but the dip at the far right side of the chart shows what I mean.
1 comments:
Like to know your reasoning for even staying with GLD if you think gold is topping out? It seems to me a lot of ETF's move almost as dramatically as individual stocks at times.
dws
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