I am sure you know the saying what goes up must come down. What will you do if the gold drops suddenly like a rock with out any warning. You know that could happen
Since gold dropped $70 from its high today, there are a couple of things to protect one’s gold earnings.
1. As the price goes up, sell short 10% or so of your holdings. Especially when gold is extremely overbought as it was in the past two weeks.
2. Buy puts as the price goes up.
3. If you did not do this as the price was going up, then it is still feasible to sell short a portion of your holdings.
This is one way to lock in some of your profits. It never hurts to take home a profit.