ZSL & DZZ : great time to short silver and gold

Gold Plunges 5.6%, Ending Below $1,800

Gold futures ended the regular session down by $104, or 5.6%, at $1,757.30 an ounce for the most-active contract, in the second-biggest dollar decline ever.

ProShares UltraShort Silver (the Fund) seeks daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of silver bullion as measured by the United States dollar fixing price for delivery in London.

The Fund will not directly or physically hold the underlying silver, but instead will seek exposure to silver through the use of financial instruments, whose value is based on the underlying price of silver to pursue their investment objective.

The benchmark price of silver will be the United States dollar price of silver bullion as measured by the London fixing price per troy ounce of unallocated silver bullion for delivery in London through a member of the London Bullion Market Association (LBMA) authorized to effect such delivery. The Fund’s investment advisor is ProShare Advisors LLC.

PowerShares DB Gold Double Short ETN (NYSE: DZZ)

Performance gold vs silver - 3 months

Performance gold vs silver - 6 months

Performance gold vs silver - 5 years

Gold ETF Saw $3 Billion Outflow In First Quarter 2011

Precious-metals prices are surging, but investors pulled about $3 billion from the largest gold exchange traded fund (GLD) in the first quarter, research shows.
(chart: 1-year GLD)

Overall, flows into ETFs were steady in the first quarter despite the ups and downs of market sentiment.

For the first quarter of 2011, inflows into U.S. ETFs were modestly positive, according to CovergEx , with $27.7 billion added to U.S.-listed ETFs. The iShares MSCI Japan (NYSEArca: EWJ) topped the asset-gathering charts, with $2.8 billion in new capital.

Meanwhile, SPDR Gold Shares (NYSEArca: GLD) unexpectedly lost around $3 billion.

Some observers believe the capital found its way into agriculture-based ETFs like PowerShares DB Agriculture Fund (NYSEArca: DBA) and Market Vectors Agribusiness ETF (NYSEArca: MOO).

ETF investors also took out $9.3 billion from iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM) , and analysts note that the money may have flowed into the Vanguard MSCI Emerging Markets ETF (NYSEArca: VWO) and other emerging country-specific plays. Nevertheless, emerging markets have recently drawn significant investor interest, with EEM garnering around $1 billion in the last week.

The majority of funds that experienced inflows were ETFs based on passive indexing with no leverage component, with over 90% of ETF investors’ incremental capital put into these products over the last quarter.

Gold ETF SPDR Gold Trust (NYSE:GLD)

A recent regulatory filing with the SEC on February 16 shows that George Soros' Soros Fund Management has doubled its holdings in the SPDR Gold Trust (NYSE:GLD). Soros is now the 4th biggest investor in GLD. John Paulson's hedge fund, Paulson & Co. owns the most GLD, with 31.5 million shares.

Soros believes gold is likely to become a "bubble asset." Low interest rates and concerns about the global economic recovery would be the driving catalysts. But as we know, bubbles occur when buying begets buying.

Gold is currently trading around $1,095 an ounce. Price estimates from Goldman Sachs and HSBC call for gold prices to rise to the $1,235 to $1,300 range.