Inverse exchange traded funds that profit from falling gold prices have received a boost the past two weeks as precious metal prices slide with global equities.
Short gold ETFs include PowerShares DB Gold Double Short ETN (DZZ), ProShares Ultrashort Gold ETF (GLL) and PowerShares DB Gold Short ETN (DGZ).
The products are geared to traders that closely monitor their portfolios rather than buy-and-hold investors. Some of the inverse ETFs use leverage, which amplifies their daily moves.
Gold and silver ETFs have fallen in recent weeks on speculation some investors are selling profitable positions in precious metals to meet margin calls.
Gold has at times fallen with stocks, causing some investors to recently question the metal’s safe-haven status.
SPDR Gold Shares (GLD) was down 1% in Friday’s premarket. Mining ETFs such as Global X Silver Miners (SIL) and Market Vectors Gold Miners (GDX) have also been under pressure.
Still, gold traders are more bullish as holdings in exchange traded products backed by gold reached a record 2,350.8 metric tons on Nov. 23, now valued at $127.1 billion, Bloomberg reported.
SPDR Gold Shares
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Tisha Guerrero contributed to this article.
Disclosure: Tom Lydon’s clients own GLD.
