ProShares Ultra Gold (AMEX:UGL)

Oversold

Commodities will continue to slide as austerity/deflation sets in.

Join the upward momentum of natural resources, especially mining interests..

The ECB is printing money.

This call might hurt over the next few weeks, months, or even years. But I'd rather own shares of a company that produce something of real value to society than a shiny metal. Inflation hedge aside, there are better places to put your money, and when these doomsday prophecies disappear, so will gold at 1700 an ounce. If the US does experience hyperinflation..well then I'll have much more to worry about than my CAPS rating.

Will lose tracking accuracy if held more than 1 day, so definitely will underperform in the long run. No brainer.

Thought about Long GGL or Short UGL, and this appears to maximize my chances given return decay plus overvalued gold. Unlikely that gold will stay at these levels 5+years.

Crud is going to hit the fan in the governments of Europe and America. This will cause people to flee the markets and invest in Gold.

I was definitely too early on this call, but gold has gone parabolic and it will come down fast when it does crash. Maybe not today or tomorrow, but within a few weeks.

Food for thought:

Think about gold as a currency (not just a commodity). The last great bull market in gold during the 1970s saw a price increase from $35 dollars to $850 the same factor today (24x) would see gold up from its 2001 low of $250 to $6,000. If the U.S. government were to recognize that gold is money and tie it’s money supply (known as M1) now nearly 2 trillion (est. July 2011) and make it convertible to all the gold it holds at Fort Knox 261,498,095 ounces (est. December 2010) would value gold at $7,662.85 per ounce or even more if we look at central bank fiat money reserves and divided that number by estimated ounces of official gold reserves by all official institutions it gets even crazier. Think about this: the number can even get really ridiculous if you look at things like the accumulated U.S. trade deficit (over $10 trillion now) to gold holdings what if all those dollars that had flowed out since our last trade surpluses wanted to flow back in but for something worth something (i.e. besides worthless Treasuries) like all the gold at Fort Knox then we get a gold price of $38,314. Or if you want to get really crazy what if we had to pay off all our accumulated national liabilities (unfunded liabilities at $114 plus national debt at $14 trillion) with something meaningful like the gold at Fort Knox we’d have a gold price of $489,671 per ounce.

I'm not saying gold is going to hundreds or even tens of thousands of dollars, but unless the U.S. get's its house in order gold is going higher. How much higher? Well that depends on the wisdom of our elected leaders and their ability to navigate an outrageous balance sheet without a printing press. Personally, I don't place much value in the long-term wisdom of Washington, Hollywood and Wall Street. I don't know how a leveraged ETF would play out in a "best case scenario" if I had to liquated UGL to live on would I prefer holding real gold instead? Probably, problem my portfolio is a young guys portfolio and gold is expensive when not purchased in bulk. So, this has to work for me, of course being younger I can take more risks.

gold is not a hot metal and the dollar will go lower lifting its prices

This ETF is a geared play on gold. Gold has had a great bull run but I think it has further to go. Probably as far as $2000 an ounce. I agree with the recent Fool article which posited that gold will continue to rise so long as the US has negative real interest rates. If it helps, don't think of it as Gold rising, rather think of it as the USD falling as it is diluted by the various Quantative Easing efforts of the US government.

"You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

-Warren Buffett 10-19-2010
http://money.cnn.com/2010/10/18/pf/investing/buffett_ben_stein.fortune/index.htm

Could not have said it better myself, Mr. Buffett. Remember this when you all you gold bulls finally realize you just paid $1,350 for a (very small) piece of metal.

Gold will do fine in this global debasement of currency process.

gold going up

junk

ultralong

Yes, I'm going short-term bearish on gold, it's just way ahead of itself here. If you haven't noticed, one of my favorite methods for trading metals is to wait until they get largely over-extended to one side of the trade or the other. Despite my loathing for moving averages, I simply look at how many deviations beyond the norm these metals are trading. Gold historicall trades within 0 to perhaps 1.2 deviations up or down from the moving average. In the last three years a deviation around 2.3-3.0 has signaled a top and a relatively violent and swift pullback. Let's face it, the dollar is going to go straight down and gold isn't going to go straight up. This is a technical and logical play here. I'm placing a limit short in at $66.38 because gold has a tendency to top, fall off 5-8%, re-rally for 2-3 days past its old high and crap out for good (at least for 2-3 months). I suspect gold may make a run at $1381 here in the next day or two then crap out. Yes crap out is a technical term and I do expect royalties if you use it.

UltraLong

Most overvalued commodity