Gold ETF 3x Short Explained for Investors

A 3x short Gold ETF is a type of exchange-traded fund that aims to provide triple the inverse return of gold.

These funds are designed to profit from a decline in gold prices, not an increase.

They work by selling short gold futures contracts, which means the fund sells a futures contract at the current price, hoping to buy it back later at a lower price.

Investors can use 3x short Gold ETFs to hedge against potential losses in a gold investment portfolio.

Investing in a Gold ETF 3x Short can be a bit tricky, but understanding how it works is key. A Gold ETF 3x Short is designed to provide a 3x daily return that is the inverse of the gold price movement.

This means that if the price of gold goes up, the ETF will go down, and if the price of gold goes down, the ETF will go up.

A 3x short gold ETF is essentially a leveraged investment that uses derivatives to achieve its goal. This can result in significant gains, but also significant losses.

For example, if the price of gold moves 1% in one day, the ETF will move 3% in the opposite direction. This can be beneficial if you think the price of gold will drop.

However, it's essential to note that a 3x short gold ETF can be volatile and may not be suitable for all investors.

If you're considering investing in a gold ETF 3x short, it's essential to understand the underlying index it tracks. The Solactive Gold Commodity Futures SL Index (SOLWSGC1) is the benchmark for this investment.

The aim of WisdomTree Gold 3x Daily Short is to provide a leveraged short exposure to gold, meaning it aims to rise 3% when the index falls by 1%, excluding fees.

This ETC is designed to be fully collateralized, ensuring that investors' funds are protected. It's worth noting that the product doesn't offer currency hedging, so investors should be aware of potential exchange rate risks.

Here's a summary of the key facts:

The ETC provides a total return that's comprised of -3 times the daily performance of the Solactive Gold Commodity Futures SL Index, plus the interest revenue adjusted to reflect fees and costs associated with the product.