Boy, that's just the way people used to talk about real estate just a few years ago. In two years, gold might be $4,000 or $400 per ounce and I don't know which. I do know that when these trades unravel, they can unravel pretty quickly and I do know that people don't go broke selling an appreciated asset too early.
Anyways you go, you're gambling.
RE: Anyways you go, you’re gambling.
For those who own Gold exchange traded funds ( e.g. SYMBOL : GLD ), which tracks the price of gold, there is a way to manage risk.
Many people tell me that owning ETF is not the same as owning physical gold, because what you have with ETF’s are simply electronic certificates assuring you that your shares are backed by physical gold in the iShares vaults.
However, the advantage of owning ETFs is you can trade them like you do stocks.
I bought GLD when gold was $880/oz. We all know it is $1300/oz now or around that figure. I have already made a ton ( metaphorically ) of money in this ETF. So what do I do ? I simply ask myself the question -— AT WHAT PERCENTAGE PROFIT AM I WILLING TO PART WITH GOLD IF GOLD DOES DROP IN PRICE ?
In my case, $1230/oz is a nice figure to take profit.
So, I put a limit to sell at $1230/oz. If Gold does drop significantly in price to what you said, my electronic account automatically sells my gold shares holdings and I still make a huge profit.
If Gold continues to rise, I will continue revisiting my limit sell order and adjust it accordingly.
That’s how traders manage their risk.
But you can only do that if you own iShares, not physical gold.