Is Gold a short?

[dr_ma]

Does anyone else think that Gold or gold related stocks would make a good short these days. It looks to me that the price is starting to trend down and it has recently had a run up. Just wondering what anybody else's opinion was on this matter.

 

[dotslashfuture]

Are you talking about gold futures or gold stocks ?

If you are talking about gold futures, I certainly wouldn't want to be short for any length of time, maybe for a daytrade only.

If you are talking about the mining stocks, that is a mixed bag. Some of them look great, some look crappy.

 

[illiquid]

Not if any of those articles on JPM come to fruition.

 

[bungrider]

you'd be absolutely insane to hold a gold short, since "war" on iraq is probably looming on the horizon...

 

[NeutronJuan]

Given the South African Government's desire to redistribute the ownership of the gold mines to the black population, you may wish to consider these as front runners in the sell short category. However, keep in mind that gold can move upward quickly and all gold mining stocks will react accordingly.

One possible approach would be a pairs trade: long a North American gold mining stock and short a South African gold mining stock. (long NEM/ short AU as an example).

 

[Tasuki]

Several times in past posts I have quoted John Murphy, the guy who literally wrote the book on technical analysis of the financial markets. I should therefore state that I have no connection whatever with murphymorris.com, but I do find his material very enlighening, especially on intermarket relationships such as the price of gold vs. the dollar vs. the bond market, vs. the stock market. Murphy has several times recently given very convincing evidence by chart analysis that gold and gold stocks are in the beginning stages of a new bull market for the yellow metal. Hence, the previous posters who said that only short term shorts should be considered are certainly on track. Even so, Thom Calandra of CBSMarketwatch has written several articles recently (very worth reading) which delve into the complexities of the gold market and the ways in which the price of the metal is seriously manipulated, so my advice would be, if you want to trade gold in any form, to keep very tight stops.