Business Case Studies & Business Publications

Betting on Gold Using a Futures-Based Go...

Matos, Pedro

Case

Betting on Gold Using a Futures-Based Gold ETF

Matos, Pedro

F-1690 | Published April 22, 2013 | 20 pages Case

Collection: Darden School of Business

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In an environment of high macroeconomic uncertainty in the fall of 2012, Tom Michelson was looking at his next trading opportunity. Michelson wanted to build a position in gold with a trading horizon of around a year and was wondering how he should go about investing in gold. Gold futures-based exchange-traded funds (ETFs) seemed like a good alternative, but he needed to understand better how gold futures worked. He was aware that futures-based ETFs for other commodities such as oil and gas had disappointing performances in recent years due to movements in the futures curves. Would a gold futures-based ETF be a good choice to profit from the price appreciation of gold?