Case Name :      Betting on Gold Using a Futures-Based Gold ETF

Authors :           Pedro Matos

Source :             Darden School of Business

Case ID :           UV6654

Discipline :        Finance

Case Length :    20 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In an environment of high macroeconomic uncertainty in the fall of 2012, Tom Michelson was looking at his next trading opportunity. Michelson wanted to build a position in gold with a trading horizon of around a year and was wondering how he should go about investing in gold. Gold futures-based exchange-traded funds (ETFs) seemed like a good alternative, but he needed to understand better how gold futures worked. He was aware that futures-based ETFs for other commodities such as oil and gas had disappointing performances in recent years due to movements in the futures curves. Would a gold futures-based ETF be a good choice to profit from the price appreciation of gold?