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przemyslaw-radomski

How do I translate the spot prices of metals into the prices of ETFs?

June 6, 2013, 12:00 PM Przemysław Radomski , CFA

How to calculate the price of the GLD ETF based on the spot price of physical gold? Your indicators and stop-loss levels make use of the prices of the physical metal. I'd like to know how to apply them to ETFs.

As of June 6, 2013 you can calculate the abovementioned price of the GLD ETF by dividing the spot price of gold by 10.34. To obtain a similar price for the SLV ETF, you would divide the price of silver by 1.034 and for the GDX ETF you would divide the current level of the HUI Index by 9.36.

As these values change in time (but remain relatively stable in the short-term), we will give you info on how to obtain them in the future. Namely, you have to look at the moving averages of the three ratios - gold : GLD, silver : SLV and HUI : GDX. The length of the moving average is somewhat arbitrary but we suggest using a 50-day one.

So, to get the GLD ETF price based on spot gold in the future, you would look at the 50-day moving average of the gold : GLD ratio and divide the spot price of gold by this value.

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