We've received several questions about an easy way to bet on lower gold prices. Normally, we would comment on this type of question in the next Premium Update, but timing is important right now, so here we are.

There is an easy way to bet on lower gold prices - there are ETNs that move inversely to the price of gold: DGZ and DZZ. The first one is DB Gold Short ETN, and the second is the DB Gold Double Short ETN meaning that the latter provides you with 2x leverage.

We would suggest using the leveraged one even if you are not interested in the leverage itself - but in this case keeping your position 2 times smaller. For instance instead of buying 10 DGZ shares you could buy 5 DZZ shares and the final outcome on your portfolio would be the same, while the amount of money "on the table" would be 2 times smaller. In this way - if something very improbable happened, and the value of the ETN would go to 0 - your loss would be 2 times smaller. We certainly don't see that happening now, but why not be prepared "just in case", especially that it doesn't cost you anything.

Analogous double ETN for silver is ZSL - ProShares UltraShort Silver.

Thank you.

Sincerely,
Przemyslaw Radomski