by Wade Hansen
Gold prices have been rocketing higher the past two days. Since the start of the trading day on Wednesday, September 2, gold prices have climbed from just above $950 per ounce to just below $1,000 per ounce.
To put things in perspective, gold prices have only been above $1,000 per ounce on two other occasions---March 2008 and February 2009. Gold prices reached their highest levels on March 17, 2008 (it's quite fitting that the market found the pot of gold at the end of the rainbow on St. Patrick's day, if you ask me) at $1,033.18 per ounce.
Needless to say, this is an extremely important time for gold prices. If they can break up and through resistance at $1,000, we could see an exponential rise in the value of gold. The question is, will you be able to take advantage of rising gold prices?
You see, for the past few years, individual investors have been taking advantage of rising commodity prices---like gold---by buying commodity-based exchange-traded funds (ETFs) and exchange-traded notes (ETNs) [ETFs vs. ETNs]. Commodity ETFs and ETNs track the performance of various commodity prices. So when you buy a commodity ETF or ETN, you make money when commodity prices go up, and you lose money when commodity prices go down.
The SPDR Gold Trust (NYSE: GLD)---an ETF that actually buys gold and holds it on reserve---has been a favorite of gold investors. It has been so popular, in fact, that the trust now holds more than $32 billion of gold on reserve.