best method of profiting from pog on paper?

Discussion in 'Gold' started by tch, Apr 10, 2011.

  1. tch

    tch New Member

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    Now I know a lot of gold bugs talk about only ever taking physical when talking about gold, and also how it's a store or preserver of wealth. But I would like to know what way people are making medium-term gains on the price of gold (POG), so say for 6-18 months because I am so confident of its rising and possibly going parabolic in that time.

    CFDs on futures look good at first, but I don't like how so many of them are priced in USD.

    I'm essentially after a CFD contract that will provide a futures contract on gold *based* on the USD spot gold price but it crucially needs to be priced in AUD and with no rolling finance charges.

    IG Markets look to have the closest thing I was after and that was the "Spot Gold (A$1 contract)". This looked great at first because if the spot gold price was $1450USD for example, the buy/sell price would be $1450AUD for your position. However, this isn't a futures contract and requires daily finance charges that can really add up with large positions.

    Despite the POG seemingly decoupling from the USD, I have my reasons for wanting this type of contract. For the spot gold USD price to go up as much as many of us expect it to (say, $2000USD in the next 2 years), the USD currency itself will still have a lot of value to lose v other fiat currencies (like the AUD currency). Who knows, it might go as low as $1.30AUD, and then you've lost nearly a third of your gains with USD-based contracts if you close out your position after the USD itself has dropped heaps in value since the time you opened your position. And this in turn would make the real POG in AUD a lot lower in value than it otherwise would've been (which I don't want to be exposed to). Hope that makes sense! So does such a contract or similar product exist?

    So I essentially need a product that has a fixed exchange rate between AUD/USD and that acts as futures contract on the POG (so there's no daily financing charges).

    Or does someone have a different way to profit in that timeframe from the POG (other than buying the physical)?
     
  2. Gold Kiwi

    Gold Kiwi New Member Silver Stacker

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    I could be wrong, but I don't think such a thing exists. Gold is priced/traded in US dollars.
     
  3. projack

    projack Well-Known Member Silver Stacker

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    You can hedge the AU$ vs US at the current price, but personally I do not like risky, marginal trades.
     
  4. tch

    tch New Member

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    I essentially want to prosper more than just buying and selling physical over the next 18 months, whilst having enough captial to ride out if spot gold drops to, say, $1000USD an ounce and close out a large position for a big profit after it hits $2000USD (without too stringent margin requirements as I've since learn that the futures contracts have pretty hefty margins).
     

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