Update: Long Gold Mining Stocks
2 weeks ago, while gold & gold mining stocks were being dumped mercilessly, I went long the gold miners via a mutual fund: Buy Gold Mining Stocks
I found the DSPML-WGF to have a 85%+ correlation with the XAU, so it’s a good enough proxy for this purpose.
- Entry: Scale in, starting today (I got in @ NAV of 11.7077 11.5965)
- Exit (stop loss): If trade not profitable in 2 weeks
- Exit (book profits): When gold:XAU ratio drops below 5
Bought more of DSP-ML WGF @ 10.8248 on August 11
I also followed that with a long gold ETF trade, which I closed at break-even. GOLDBEES then went all the way to 1220 before dropping back. Oh well!
As for gold miners; my average buy was @ 11.21 and the latest NAV is 11.52. After factoring in the 2.25% entry load & 1% exit load, I am about breakeven and the stop-loss isn’t triggered. Doesn’t look like this one is going to make 10%+ for me, but let’s see what happens next week.
Note that using a mutual fund is probably the most inefficient way to trade these short-term moves. But this was an experiment, and there is no other way for us in India to trade gold miners. 
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