What does Short Gold ETF mean?
An exchange traded fund designed to trade in a direction that is diametrically opposite to gold bullion. Short Gold ETF tracks the Gold rates by using short selling, futures contracts and other options. The Short Gold ETF is traded on the reverse of the index which it tracks. It is also known as Inverse Gold ETF and Reverse Gold ETF.
Futures Knowledge Explains Short Gold ETF
Short Gold ETF is generally used by investors to hedge against a downward move in gold prices, or by speculators to execute a bearish trade in gold. So it is also referred to as a gold bear ETF. Short Gold ETF makes profit from falling gold prices. Everyday an adjustment of -100% is done to a short gold ETF matching with the change in the gold price. Reference prices may be based on a gold index’s price, gold futures and contracts, physical gold, or gold mining stocks. Investors purchase short gold ETF if he or she expects a drop in gold prices.