# Shorting Gold



## FlyFishing (6 Aug 2008)

Is there any easy way to 'short gold'? I don't want to go thru teh hassle of opening a special account to just do this one transaction. ( i have goodbodys online account )

Is there a stock or etf that works in the opposite direction of gold ?

tnks..


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## Upstihaggity (6 Aug 2008)

you could open a spreadbetting account -


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## FlyFishing (6 Aug 2008)

Upstihaggity said:


> you could open a spreadbetting account -



tnks. is that the only way to do it ? its just the hassle of all the documentation that stops me.


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## Howitzer (6 Aug 2008)

Short one of the mining companies, but I don't think Goodbodys Online has any "complex" trading tools which would allow you to short anything.


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## thomsk (7 Aug 2008)

Short gold? Risky business, I would have thought at the moment - with resistance being shown around $850, and so much volatility around.
What price do you see it falling to, flyfishing?


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## limerickboy1 (7 Aug 2008)

i would have shorted gold at 980 but at 850 its a bit risky. the 200 day MA is there


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## FlyFishing (7 Aug 2008)

thomsk said:


> Short gold? Risky business, I would have thought at the moment - with resistance being shown around $850, and so much volatility around.
> What price do you see it falling to, flyfishing?



You probably are not going to believe me but i think it will crash to about 500 bucks. 

My reasoning is that alot of investors have used it to hedge against inflation and falling equities but Gold is a very old form of security which i dont believe it deserves anymore.

So, a change in perception will result in the price crashing.

I am pretty sure about this, like i was with Obama in Dec 2007 , much to the dismay of Paddy Power.


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## bigred (7 Aug 2008)

Buy out of the money put options? Either directly on Gold, a Gold EFT or even a mining company?


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## markowitzman (7 Aug 2008)

gld is the ticker for the spdr.


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## FlyFishing (7 Aug 2008)

markowitzman said:


> gld is the ticker for the spdr.



I dont know anything about spreadbetting ( only the basics ) but lets say i wanted to short gold believing that it will touch 500 dollars.

What kind of call/put would i do if i wanted to limit my exposure to say 1000 euros?


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## markowitzman (7 Aug 2008)

http://www.marketwatch.com/tools/quotes/options1.asp?symb=GLD&sid=3219852&dist=TQP_Nav_options
these are examples of delayed quotes for various calls and puts with various expirations.


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## cromulent (7 Aug 2008)

As long as the Fed, ECB & BoJ continue running neutral/negative monetary policy it is a tough call to be short gold.


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## FlyFishing (7 Aug 2008)

I was looking at paddypower financial trader demo. You can short gold on that site.

So i messed around with it and created this:

*Sell 10 of Gold Rolling Daily at 550.5 goodtil Cancelled *

Could someone explain to me what i did 

I didn't see anything about stoplosses on commodities but i am not sure i am doing it correctly.


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## z101 (7 Aug 2008)

your that sure about Obama??

you win Ohio and your president. Can you really see Ohio hicks voting for Obama??


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## FlyFishing (8 Aug 2008)

Ceatharlach said:


> your that sure about Obama??
> 
> you win Ohio and your president. Can you really see Ohio hicks voting for Obama??



Yep. And looks like the money thinks so aswell.

;
Now i am hoping Sebelius gets the nod for the vice position............and speaking of Ohio...guess where her Dad was governor.


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## FlyFishing (8 Aug 2008)

Seems i was right. If only i had figured out this shorting thing earlier 
Still time to catch it before it drops to 500.



> Aug. 8 (Bloomberg) -- Gold fell to an eight-week low in London on speculation dollar gains will spur sales by investors who bought the metal as an alternative to earlier declines in the U.S. currency. Silver dropped to the lowest in six months.
> Gold has slid 5.6 percent this week, the most since March 21, as the dollar rallied against the euro on signs of slowing European growth. The metal traded below its 40-, 100- and 200-day moving-averages for the first time in a year, a sign it may fall further, according to traders who follow technical charts.
> ``The situation in gold is not very good,'' said [broken link removed], a futures broker at MF Global Ltd. in London. ``A lot of people are saying if we break $850, we're going to *$600*.''


http://www.bloomberg.com/apps/news?pid=20601082&sid=aZ2fObCRDHQo&refer=canada


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## thomsk (9 Aug 2008)

Question is...will it break much past $850?


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## markowitzman (9 Aug 2008)

doubt it and i think Mario thinks the same but is not going to tell joe punter on bloomberg.


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## FlyFishing (9 Aug 2008)

markowitzman said:


> doubt it and i think Mario thinks the same but is not going to tell joe punter on bloomberg.



I don't understand your reference to 'Joe Punter on Bloomberg'. Can you elaborate?


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## FlyFishing (9 Aug 2008)

thomsk said:


> Question is...will it break much past $850?



In my opinion; definitely.


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## joe sod (9 Aug 2008)

FlyFishing said:


> You probably are not going to believe me but i think it will crash to about 500 bucks.
> 
> My reasoning is that alot of investors have used it to hedge against inflation and falling equities but Gold is a very old form of security which i dont believe it deserves anymore.
> 
> ...



This is a very dubious statement, you don't like gold so you want to see it fall to 500 because gold is old and a hedge against inflation, you are making the classic mistake of mistaking short term trends for long term trends, firstly inflation is very much alive and will take years to get under control, secondly gold has had a few big corrections in its run up since 2001 which has crucified speculators both on the up and down swings most recently in may 2006, this is just another correction in both gold and oil to flush out the speculators


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## joe sod (9 Aug 2008)

a safer strategy would be to short the euro against the dollar


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## markowitzman (10 Aug 2008)

fly fisher when the market goes up bloomberg and cnbc are the ultimate ra ra outfits......
market up........get the bulls to cheerlead and when the market tanks get the bears in to spin.
Do not make investment decisions on what anyone says on these soaps.
Good luck.


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## thomsk (10 Aug 2008)

Would second that notion. Think I'd be more tempted to go with gold breaking $1000 within the next year, or as joe mentioned, bet on the $/€ scenario.


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## FlyFishing (10 Aug 2008)

markowitzman said:


> fly fisher when the market goes up bloomberg and cnbc are the ultimate ra ra outfits......
> market up........get the bulls to cheerlead and when the market tanks get the bears in to spin.
> Do not make investment decisions on what anyone says on these soaps.
> Good luck.



I don't believe i gave the impression that I was making investment decisions based on these 'soaps'. I have made my own analysis and i quoted Bloomberg as a backup.

But that is the beauty of markets. You can put your money where you mouth is and be proved right or wrong.


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## FlyFishing (10 Aug 2008)

thomsk said:


> Would second that notion. Think I'd be more tempted to go with gold breaking $1000 within the next year



I am glad you think so. I hope others do aswell.


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## FlyFishing (10 Aug 2008)

joe sod said:


> This is a very dubious statement, you don't like gold so you want to see it fall to 500 because gold is old and a hedge against inflation, you are making the classic mistake of mistaking short term trends for long term trends, firstly inflation is very much alive and will take years to get under control, secondly gold has had a few big corrections in its run up since 2001 which has crucified speculators both on the up and down swings most recently in may 2006, this is just another correction in both gold and oil to flush out the speculators



I would disagree with the description of my statement as dubious. It is my opinion so should be respected as such.
Also, i have no like or dislike of gold , nor indeed do i 'want' gold to fall. Should i end up shorting it, then i would 'want' it to fall but at present i have no financial stake other than my equities benefiting from others fleeing commodities. ( and the resultant rising dollar as my equities are all US )

I am making a long term prediction based on long term analysis and it has nothing to do with short term movements.

I do not believe it is a short term correction but a gathering realization that the established thinking of gold as a safe haven to be inherently false.


[FONT=Arial, Verdana, Helvetica, sans-serif]
[/FONT]As I recently read


> [FONT=Arial, Verdana, Helvetica, sans-serif]More than any other commodity, gold’s price rises (and falls) with demand from investors; the demand from consumers and industrial users is very much a secondary consideration. Or to put it another way, what ultimately controls gold is mass psychology.




[/FONT] So similar to how a change in mindset is leading to a dramatic fall in Irish property values ( dis-proportionate to interest rate rises, credit crunch, economic factors ) , the price of Gold will suffer the same fate.

Out of interest, do any of ye have a financial stake in the price of gold or is it just speculation. Do ye back up yer bullish statements of Gold with real money.


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## mooney76 (10 Aug 2008)

hey thomsk
Predictions on usd so in 6 months time
Lets have ye


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## dunkamania (11 Aug 2008)

At the risk of staying on topic and answering the OP's question I will mention the Short Gold ETF which aims to provide same return as being short gold. Ticker is SBUL


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## FlyFishing (11 Aug 2008)

dunkamania said:


> At the risk of staying on topic and answering the OP's question I will mention the Short Gold ETF which aims to provide same return as being short gold. Ticker is SBUL



Thanks you Sir. Exactly what i was looking for.

http://finance.google.com/finance?q=SBUL


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## FlyFishing (11 Aug 2008)

Found this.

http://www.bloomberg.com/apps/quote?ticker=SBUL:LN



> ETFS Short Gold is an Exchange Traded Commodity (ETC) which is UCITS eligible. It is designed to provide a return equal to minus one times (-1x) the daily change in the Dow Jones-AIG Gold Excess Return Index (before fees and interest), and allows investors to gain from a fall in the underlying index without the need to borrow or short sell.



Not sure whether Goodbodys will add it to their list of quoted shares/funds but i will contact them to find out.


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## FlyFishing (11 Aug 2008)

> *SAN FRANCISCO (MarketWatch) -- Gold futures dropped to their lowest level of the year Monday afternoon as a decline in oil prices and strength in the dollar sent the precious metal's prices down by almost as much as $40 an ounce in electronic trading.*
> 
> Gold for December delivery fell to a low of *$825* an ounce in Globex electronic trading. That's gold futures' lowest price since late December. It was last down $31.80, or 3.7%, at $833.





> "We've got stronger dollar, weaker crude and a large-scale commodity liquidation working," said Zachary Oxman, a senior trader at Wisdom Financial.
> Without heightened geopolitical concern over the military conflict between Russia and Georgia, which started last week, gold prices may fall even lower, he said.
> "I am bearish gold down to *$790* right now," Oxman said.


http://www.marketwatch.com/news/story/gold-futures-edge-lower-traders/story.aspx?guid={662287A7-E4E1-4384-B15A-D1F6294D255D}


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## FlyFishing (12 Aug 2008)

> Aug. 12 (Bloomberg) -- Gold, platinum and silver plunged to their lowest in more than seven months as the dollar gained, reducing their appeal as an alternative investment.
> Precious metals also slumped as declining crude oil prices cut their attraction as an inflation hedge. Gold fell as much as 2.6 percent to $802.34 an ounce, the lowest since Dec. 21, and 22 percent below its March 17 record of $1,032.70 an ounce. Platinum fell as much as 3.4 percent and silver 4.5 percent.


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## z106 (12 Aug 2008)

Out of curiosity - what is your main reason for thinking that gold will decline ?

Do you agree that inflation is a big problem at the moment?
And will most likely get worse !

In a nutshell - What in your mind is the overriding factor to push gold downwards?


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## dunkamania (12 Aug 2008)

Given where gold was trading three years ago, the inflation arguement is fairly thin and would imply a fundamental value significantly below where its currently trading


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## FlyFishing (12 Aug 2008)

qwertyuiop said:


> In a nutshell - What in your mind is the overriding factor to push gold downwards?



A change in perception as to the perceived value of Gold and the end of the credit crunch. ( or to be more exact, the declining influence of bank losses on the general market )


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## dunkamania (13 Aug 2008)

We may be reasonably close to the end of subprime writedowns, however we are moving in the a cycle of prime writedowns so credit crunch not going away anytime soon. I see weakness going forward in gold simply on the basis of more sellers than buyers. The 200+% move in recent year makes a mockery of the inflation hedge arguement. I would be interesting to hear peoples fundamental valuations on gold but if it is $1000 for example than it was trading at a massive discount for most of this decade, and still is.


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## limerickboy1 (13 Aug 2008)

i think we are going to see selling in all asset classes. the big guns i.e. brokerage houses are very short of capital and will have to liquidate positions on weakness not add to them as has been the norm for a long time now. so any selling will begett further selling and a massive move to cash


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## FlyFishing (13 Aug 2008)

FlyFishing said:


> ;
> Now i am hoping Sebelius gets the nod for the vice position............and speaking of Ohio...guess where her Dad was governor.



Now i know this is going way off my original question but since this vp for obama will be announced very soon i thought others following this thread would enjoy this read. I hope the moderators will forgive me just this once. 
Besides , if Sebelius gets it, it will do wonders for the US economy so that is important for any would-be-investors....   ( besides me winning my wager  )

*Running Mate Identities Revealed... in the Convention Schedules?  *

[broken link removed]



> *Conclusion:* Obama will definitely choose a national-security expert--like Senate Foreign Relations Committee Chairman Joe Biden; Sen. Chuck Hagel of Nebraska; Sen. Jack Reed of Rhode Island or Sam Nunn, former Georgia senator and one-time Armed Services Committee chairman--as his running mate.
> *Line of Reasoning:* It fits the theme. As Kansas Governor, Convention Co-Chair and [broken link removed] Kathleen Sebelius [broken link removed] Monday, the leitmotif for Wednesday night--that is, the night Obama's sidekick takes the stage--is "Securing America’s Future." "It's about honoring our veterans and the families of our veterans," she told reporters, "and how to make us safer and move past the divisiveness and into the future." Calling Sebelius's "intriguing announcement" a potential "slip-up," 411mania.com concluded that "Obama's VP pick will in fact hold gravitas in the areas of military/national security issues."
> *Credibility Rating:* Three. Sure, it would make sense for Obama to highlight Biden's or Reed's credentials on a night devoted solely to national security. *But wouldn't it make as much sense him to give a Sebelius* or a Kaine--relative foreign-policy lightweights--an opportunity to show that they too can speak convincingly about keeping America safe at the very moment millions of Americans are forming their first impressions? A successful convention speech can become a credential in and of itself--see: _Obama, Barack H._--so there's no reason to think that Obama would steer a greener veep away from security just because it's a perceived weakness. In fact, quite the contrary. As Sebelius herself said on Monday, "I think anyone Sen. Obama picks as Vice President will be more than prepared to address those issues."


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