Short Gold ETF

AAA

DEFINITION of 'Short Gold ETF'

An exchange traded fund that seeks to profit from negative changes in the price of gold. Each day, a short gold ETF's price is adjusted by -100% of the daily percentage change in the price of gold. The price of gold may be based on the price of a gold index, physical gold, gold futures contracts or gold mining stocks for a short gold ETF's purposes. An investor would buy a short gold ETF if he or she expected the price of gold to decline.


A short gold ETF may also be called an inverse gold ETF or a gold bear ETF.

INVESTOPEDIA EXPLAINS 'Short Gold ETF'

Short gold ETFs are intended as short-term investments. They require advanced investing knowledge and are not appropriate for beginner investors. Investors must monitor their holdings in short gold ETFs carefully because these products often use leverage, which can quickly magnify both gains and losses. Short gold ETFs can also experience wild fluctuations in price. An advantage of short gold ETFs is that they are easy to buy and sell. Unlike taking an actual short position in gold, buying a short gold ETF does not require the investor to maintain a margin account.

RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Reverse Gold ETF

    Exchange traded funds that are designed to trade in a direction ...
  3. Double Gold ETF

    An exchange traded fund that tracks the value of gold and responds ...
  4. Gold Certificate

    A physical document resembling a paper bank note that entitles ...
  5. Gold Bug

    An individual who is bullish on gold. Gold bugs believe that ...
  6. Gold Fix

    The twice-daily act of setting gold prices by the five members ...
RELATED FAQS
  1. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>
  2. What are some of the most popular ETFs that track the retail sector?

    Some of the most popular exchange-traded funds (ETFs) that track the retail sector include the iShares S&P Global Consumer ... Read Full Answer >>
  3. Are there leveraged ETFs that follow the retail sector?

    There are many exchange-traded funds (ETFs) that track the retail sector or elements of the retail sector, and some of those ... Read Full Answer >>
  4. If I believe retail sector companies are overvalued how can I profit from a fall ...

    For an investor who believes that retail sector companies are overvalued, there are three basic strategies he can employ ... Read Full Answer >>
  5. What is the 12b-1 fee meant to cover?

    A 12b-1 fee in a mutual fund is meant to cover the fees of companies and individuals through which investors of a fund buy ... Read Full Answer >>
  6. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Exchange Traded Notes: An Alternative To ETFs

    ETNs offer yet another way to track an index. Find out what they have to offer, and what's at stake.
  2. Economics

    What Is Wrong With Gold?

    Despite its historic and symbolic appeal, this metal is simply a commodity. Here we explore its meaning as an investment.
  3. Investing

    A Holistic Approach To Trading Gold

    Combine technicals and fundamentals to tune out noise and confirm trends in this commodity.
  4. Options & Futures

    Getting Into The Gold Market

    Add some sparkle to your portfolio by getting in on this classic commodity.
  5. Options & Futures

    Trading Gold And Silver Futures Contracts

    If you are a hedger or a speculator, gold and silver futures contracts offer a world of profit-making opportunities.
  6. Investing

    Using Technical Analysis In The Gold Markets

    The quest for this shiny commodity has made millionaires of paupers and, on the flip side, ruined many an investor.
  7. Options & Futures

    Does It Still Pay To Invest In Gold?

    This asset's appeal dates back thousands of years. Find out whether it can live up to the hype.
  8. Mutual Funds & ETFs

    ETF Analysis: iShares S&P 500

    Find out more about the iShares Core S&P 500 Exchange Traded Fund, the characteristics of this ETF and the suitability of the iShares Core S&P 500 ETF.
  9. Mutual Funds & ETFs

    ETF Analysis: Market Vectors Russia

    Learn about Market Vectors Russia ETF, its top holdings, as well as cyclical and political risks associated with investing in the Russian market.
  10. Stock Analysis

    Southwest & Cheap Oil: The Perfect Combination?

    Discover how falling oil prices (and well-timed futures contracts) benefit Southwest Airlines.

You May Also Like

Hot Definitions
  1. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  2. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  3. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  5. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  6. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!