I have no idea what’s happening in this thread. GLD is supposed to be based on the underlying value of gold stored by the ETF fiduciary. Are you somehow predicting the price of Gold as a metal?
Or are you arbitraging NAV inefficiencies?
Personally, since Gold is part of my overall portfolio, I invest in the ticker CEF which is a closed-end fund that holds gold and silver. Historically, when gold is doing poorly, it trades at a 5% to 10% discount to NAV. And when gold is doing well, it trades at a 2% premium to NAV. The reason for this is that it’s a closed-end fund that cannot be liquidated by share holders for the underlying metal. Otherwise it would never drop to 10% below NAV since a hedge fund would come in and buy them all and liquidate. (Sprotts has done this with another fund and has been attempting to do it with CEF)
This is beneficial to me, since I’m only selling gold when it’s doing well, and buying it when it’s doing poorly, so I make money both on metal price and also on the discount. For example. I rebalanced into it at an 8% discount about 6 months ago and it’s now trading at a 2% discount as of today. All else equal with the underlying metal, I made 6% profit just on the NAV. This only works if you plan to buy/hold long term and rebalance specifically out of it when it’s doing well and into it when it’s doing poorly.
No idea what we’re doing with GLD specifically though. I’m highly skeptical anyone can predict the underlying gold metal price using any statistical models. If we’re doing some kind of NAV bid/ask arbitrage then I imagine that’s definitely possible but question why a huge hedge fund isn’t already doing it and extracting all of the economic rents for themselves as professional arbigeurs.