Strategy: Gold Currency Strategy

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  • #47963
    Alexander Horn
    Keymaster

    I normally prefer doing direct FX, so short either Yen or Aussie. The fees from the borrowing are lower than the sum of ETF cost and leverage effect, and I see the FX effect directly in my “virtual FX account” which is helpful as I also have some other currencies. The latter is not much of a benefit if you only run USD normally.

    #48023
    Mark Faust
    Participant

    Alex,

    So it tuns out that the currency ETF’s you use in this strategy are not allowed in my Fidelity Brokerage Link account. They were, however, allowed in my normal IRA..(I think I had to sign an “aggressive investor status form” a while back that allows it….Regardless, I am in with CROC…the spread was only .06 when I made the trade….I put it right in the middle and it filled quickly….
    (sidenote: On Friday, CROC had its highest Volume in 4+ years with 64,600)

    Mark

    [quote quote=47962]Hi Mark, I hear you and this is really a pain in the neck. It´s just that using Gold and FX is such a nice hedge, but indeed hard to trade in deferred accounts. We also keep looking for alternatives, please drop us a line if you find something at your end.
    [/quote]

    #48038
    Alexander Horn
    Keymaster

    Yeah, the 64k was me, sorry for that ;-)

    #53678
    Howard
    Participant

    I am wondering whether you can shed some light on the recent performance and allocation of the strategy. Over the past few months, YCS has been outperforming GLD, but yet, the model is recommending allocation of 70-80% to GLD (the underperforming asset) as opposed to weighting YCS or other long USD ETF higher. Intuitively, it doesn’t seem the strategy is following the USD strength momentum by overweighting the long USD etf. Looking forward to hearing your thoughts.

    #53838
    Howard
    Participant

    Hi team, any update on this inquiry? Tks!

    #53851
    Frank Grossmann
    Participant

    The Gold strategy is thought to be a “Gold” strategy not a currency strategy, so the currencies should only be used to reduce Gold price losses due to a strong US$. At the moment we are invested 20% in YCS which means that we hedge 40% of the currency risk. It would be very dangerous to invest too much in these 2x leveraged currency ETFs, because they can do wild unpredictable moves if a national bank changes money politics.
    Another reason that the YCS hedge allocation is still quite low at the moment is, that the Gold was still flat for the year until May, so most of the 6% down this year happened in June.

Viewing 6 posts - 16 through 21 (of 21 total)
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