The Hot List: 3 Precious Metals ETFs for Short Term Traders
Heading into the final trading day of the week, where are short term traders and active investors most likely to find the biggest edges to the long side?
Pulling back toward levels from which they have historically outperformed the broader market are trio of precious metals-related exchange-traded funds. Each of these ETFs can provide traders and investors with the kind of exposure to precious metals like gold and silver once only available through the commodity markets and, more to the point, are increasingly oversold and due for a bounce.
The first, and most important precious metals ETF to mention is the SPDR Gold Trust ETF (GLD). Trading in bull market territory, shares of GLD have closed lower for four days in a row ahead of trading on Friday, finishing at oversold levels for the last three of those sessions. GLD is one of the most widely-traded commodity ETFs in the market, being a favorite of both professional and independent investors and traders alike.
The same is true for the iShares COMEX Gold Trust ETF (IAU). Down four in a row and closing in oversold territory above the 200-day for the past three consecutive sessions, shares of IAU fell to a new 7-day closing low in Thursday’s session, as well.
One other precious metals ETF that deserves mention is the iShares Silver Trust ETF (SLV). Here the main difference bewteen SLV on the one hand and GLD and IAU on the other is the fact that SLV remains below its 200-day moving average.
Down two in a row ahead of Friday’s trading and finishing at new short term lows, SLV may be a more speculative option for conservative traders and investors looking for long exposure in silver, given the ETFs current location in bear market territory. In fact, any near term strength in SLV, from a historical perspective, is probably best looked at with suspicion.
All three exchange-traded funds in today’s report were pulled from ETF research available through The Machine. To learn more, click here.
David Penn is Editor in Chief of TradingMarkets.com