DUST - DUST: Gold Overbought But I Still Wouldn't Buy This ETF
2024-04-24 17:28:22 ET
Summary
- Gold is overbought and may experience a sharp pullback, so investors may be tempted to consider trading the Direxion Daily Gold Miners Index Bear 2x Shares ETF.
- However, inverse ETFs like DUST suffer from volatility decay and are difficult to make money from, unless traders have perfect market timing abilities.
- Instead of DUST, investors should consider reducing their long holdings or buying put spreads as a hedge against a potential gold miners correction.
A few days ago, I wrote an article warning that gold bullion is very overbought and prone to a sharp pullback. Since gold miners are very correlated with the price of the commodity, gold investors may be tempted to play a potential pullback in gold miners via a long trade on the Direxion Daily Gold Miners Index Bear 2x Shares ETF ( DUST ). Does this trade make sense?...
DUST: Gold Overbought, But I Still Wouldn't Buy This ETF