Take Advantage of Gold going down with DB Gold Double Short ETN (DZZ, rated BUY)
When gold started its ascent in 2001 it seemed reasonable especially with all the geopolitical turmoil at that time. By 2011 we experienced nearly 5 fold increases in gold prices. This is a ludicrous price for gold especially when the retail and industrial demand for gold has not nearly increased by that amount. The smart investor will ask themselves how muck more can the price of gold go up? Can current prices of gold actually sustain themselves at these levels? The answer is no. Gold has only gone up because of hedging against currencies. The more geopolitical turmoils governments face the more uncertainty is created around which economy will provide the safest preservation of wealth. No one wants to invest in a country where the currency may tank along with real estate prices. Granted that gold would provide some level of security it is by no means the fail safe way to avert the erosion of wealth. The common sense rule is this: When your land and currency are not worth anything will the price of gold go up? There has to be a point in which overpriced GOLD will have to be sold for less than what it is worth. Let me try again, when everyone's land and currency is worth nothing who will be able to buy GOLD? How can more people buy more gold if the pool of available money and land is decreasing? There will be a breaking point. This is why GOLD will eventually reach its breaking point. Is the breaking point now? This is the million dollar question. No one has a crystal ball. If the breaking point was now I am sure everyone it would not be a big surprise to anyone.