How to Play Gold With an ETF

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Oct. 25 (Bloomberg) -- Trading Advantage Senior Market Analyst Alan Knuckman discusses his play for gold on Bloomberg Television's "Market Makers." (Source: Bloomberg)

It is time for the options insight.

This could be gold's time to shine.

The strategy for a gold etf.

A gold miner's etf.

Thanks for joining us.

It is not that you are overly bullish, but you are not necessarily bearish on gold.

It is a point of risk versus reward.

I think it is a good value.

I like all things gold.

I like gold.

I like goldman sachs.

The miners have gotten hit more than gold itself.

If we get above this and get above that 1430 level, gold could make a move to 1600. i think there is a better payoff in ddx -- gdx.

Your breakeven is only $75 or $80 above where we are right now.

And you have five months with the march option.

It is a low risk him a a good risk reward play.

You can look at gdx getting back up to the conservative level and it will be profitable.

It is down about double what gold itself is.

Why have we seen this lag in the gold miners and why do you think they will snap back along with the gold prices?

They get exaggerated on the upside and downside.

They got concerned when gold prices went down because they don't have a lot of capital to work with when they are not getting their money for gold somewhat accosts to get it out of the ground.

I am looking for that rubber band to snap back.

I'm looking for money to get chased back into the sector as gold gets more firm.

I think gdx is a good area to look at.

It should get people going again in this etf.

The big risk with gold would seem to be a rate volatility and rates going higher.

When you get to march of next year, if that is what you were looking at for expiration, that starts to get into potential tapering territory where you could see rates start to move up.

How big of a risk as this?

The reason i'm buying march is so i have enough time to be right.

It gives me plenty of time.

I can get out of it sooner than that if need be.

Everybody has first forgotten about gold.

If everybody starts chasing it, it can get going again.

Goldman sachs made their call.

We will see.

The fact that it is not going lower to me is a bigger sign then anything else with all of the potential pressures it can have.

Thank you so much.

A little more bullish on those gold prices through the gdx, the

This text has been automatically generated. It may not be 100% accurate.


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