Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Gold question
Old 09-18-2008, 03:47 PM   #1
Recycles dryer sheets
 
Join Date: Jul 2008
Location: Joaquin, Texas
Posts: 164
Gold question

Help me understand. Gold closed up today $46.10 at $892.20. GLD closed down 3.11%. If GLD is an ETF that tracks the price of gold then why the big difference?
__________________

__________________
Life is good. Then you die.
lawman is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-18-2008, 04:52 PM   #2
Moderator
bssc's Avatar
 
Join Date: Dec 2005
Posts: 9,936
Good reminder that the T in ETF is for traded. The traders are betting that gold prices is going to go down in the long run and this is a temporary spike. This is similar to closed-end mutual funds trading less than their NAVs.
__________________

__________________
Angels danced on the day that you were born.
bssc is offline   Reply With Quote
Old 09-18-2008, 05:11 PM   #3
Recycles dryer sheets
 
Join Date: Jul 2008
Location: Joaquin, Texas
Posts: 164
Quote:
Originally Posted by bssc View Post
Good reminder that the T in ETF is for traded. The traders are betting that gold prices is going to go down in the long run and this is a temporary spike. This is similar to closed-end mutual funds trading less than their NAVs.
Call me dumb but I still don't understand..That's not tracking gold. That's speculating..If gold goes up again tomorrow and the next day and the next day and the next where's that gonna leave the "tracking " fund?
__________________
Life is good. Then you die.
lawman is offline   Reply With Quote
Old 09-18-2008, 06:10 PM   #4
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Quote:
Originally Posted by lawman View Post
Call me dumb but I still don't understand..That's not tracking gold. That's speculating..If gold goes up again tomorrow and the next day and the next day and the next where's that gonna leave the "tracking " fund?
It will eventually catch up and probably overshoot. I own SPY which tracks the S&P500 but it frequently closes +/- 0.2% away from its "asset value." It pisses me off but that's because of my OCB tendencies.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 09-18-2008, 06:13 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Feb 2006
Posts: 1,183
Quote:
Originally Posted by 2B View Post
It will eventually catch up and probably overshoot. I own SPY which tracks the S&P500 but it frequently closes +/- 0.2% away from its "asset value." It pisses me off but that's because of my OCB tendencies.
OCB does that mean overly crafty boy
__________________
crazy connie is offline   Reply With Quote
Old 09-18-2008, 06:19 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,439
Quote:
Originally Posted by crazy connie View Post
OCB does that mean overly crafty boy
I thought it was overweight crotchety b@stard
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 09-18-2008, 06:20 PM   #7
Thinks s/he gets paid by the post
MasterBlaster's Avatar
 
Join Date: Jun 2005
Posts: 4,359
I don't trade gold but from what I can see is gold "futures for December Delivery" were up 5.5% to $897.

The exchage traded fund GLD tracks a spot price. The spot price of Gold today was down 1.26% at the close.

They really aren't the same thing. You are trying to compare spot prices to futures prices. What the numbers tell you is that the market believes gold prices will be somewhat higher come december.

Am I missing something here ?
__________________
MasterBlaster is offline   Reply With Quote
Old 09-19-2008, 04:08 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
your correct the futures price and the spot price can be different. a strike now can make the spot price of something very high. the futures outlook for say 9 months maybe that the strike will be over and hense a lower price

by the same token buying the shares of companies in the commodities business isnt always the same as owning the commodity. if a strike crippled exxons oil output the company may drop but oil can soar.... i owned a small company called AEZ (american oil and gas)which dropped big time while oil was soaring only to have it rise 30% in one trading session yesterday while oil dropped thru 100.00 a barrell. go figure

expected profitability, strikes, bad management, enviornmental controls, financial and cash flow issues all can cause a company to drop at the very time the commodities are soaring
__________________
mathjak107 is offline   Reply With Quote
Old 09-20-2008, 09:36 AM   #9
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Quote:
Originally Posted by crazy connie View Post
OCB does that mean overly crafty boy
Obsessive Compulsive Behavior -- I think Monk is normal.
__________________

__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Selling Gold yakers Stock Picking and Market Strategy 4 11-14-2007 10:05 PM
Out of gold haha Stock Picking and Market Strategy 7 11-13-2007 07:06 PM
And gold, gold!, GOLD!!!!!!!!!!!! yakers FIRE and Money 1 05-17-2006 11:03 AM
Gold mb FIRE and Money 199 04-17-2006 06:40 PM

 

 
All times are GMT -6. The time now is 08:06 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.