Beware GLD. Trade it, but don’t invest in it!

Posted by Mark Leibovit - VR Trader

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Holdings in SPDR Gold Shares hit a new record of 1,038.17 tons Wednesday. That’s up 9.18 tons from the previous day. Impressive news considering gold had fallen more than a hundred dollars from its high. There is obviously some strong underlying demand for gold that is ignoring the day to day price swings. My concern, however, is just how accurate those reports are, whether there is truly gold backing that fund at all. I want to see it! Also, remember, owning GLD presents ‘counter-party’ risk. If you could physically claim you share of the gold at any moment and load it up in the trunk of your car, I would be less cynical. But, that’s not the case. Beware GLD. Trade it, but don’t invest in it! You may come in some Monday morning and it the whole thing could blow up on you! Owning physical gold is the only true play! Don’t forget that!

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Mark Leibovit was named the #1 Intermediate Market Timer for the 10 year period ending in 2007; the #1 Intermediate Market Timer for the 3 year period ending in 2007; the #1 Intermediate Market Timer for the 8 year period ending in 2007; and the #8 Intermediate Market Timer for the 5 year period ending in 2007. NO OTHER ANALYST SURVEYED APPEARED IN ALL FOUR CATEGORIES FOR INTERMEDIATE MARKET TIMING AS PUBLISHED IN TIMER DIGEST JANUARY 28, 2008!

Mark Leibovit was also named the #1 Gold Timer for the one-year period ending March 25, 2008.