[video] Quick Take: Sell the August Spike in Gold
NEW YORK (TheStreet) -- Gold has had a good run in August, but could that be changing soon? TheStreet's Joe Deaux talks to Mike McGlone, U.S. research director for ETF Securities, about his thoughts on the yellow metal.
McGlone was quick to dismiss the idea that investors should exit their position in gold. He called the precious metal an investment vehicle, not a trading vehicle.
There are two ways to be invested in gold -- either overweight or underweight. McGlone suggested that being overweight in gold is appropriate for investors at this time.
Gold was already heading higher due to natural demand for the physical metal, once it hit new lows below $1,200 per ounce in June. However, the tensions in Syria have helped push prices higher.While he views the overall down move in gold as just a correction in a long-lasting bull market, he does expect profit-taking near $1,500 per ounce. There is a mean-reversion play on display, with equities prices coming down and gold prices going up. McGlone concluded that the metal should find support near $1,400 on a pullback. He added that overall most investors are too underweight gold, and should be looking to add to their position as time goes on. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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