DGZ long position as a gold short alternativeBuying the DGZ gold short ETN gives exposure to the inverse of gold price, so when the price of gold fall - the value of this ETF increases. Marking that gold is hitting record highs - partially due to the commodities boom cycle, moving forward it is estimated to revert to the mean. To take advantage of any drop in price would lead to an increase in DGZ.
Technical Analysis
RSI shows a similar pattern to mid-Q2 of 2011.
The price has broken below the 2013 support level.
DGL is the gold ETN line to see the spread between the two. Spread gap is quite high and historically this spread has reduced over the long-term.
MACD is relatively flat which shows not much volatility since 2021. The increase in gold price is less sensitive to the drop in DGZ. As the spread converges, sensitivity should increase and rate of price appreciation in DGZ should rapidly increase once gold reverts to the mean.
Fibonacci retracement shows price approaching 23% reversal. a break through this level can see rapid decrease.
