Crowded trades: Gold, EM top list

Here it comes. The crowded gold trade always seems to resurface as inflows into gold intensify.

Nicolas Colas, chief market strategist at institutional brokerage BNY ConvergEx, says a number of trades are looking “crowded,” meaning too many investors have placed bets on a market moving in one direction. The trade could still work for a while. But it may not have as much payout as the investor who gets in late is probably hoping.

1. Buying gold. “Countless Internet banner ads and television commercials” are the give-away, Colas said. Shares of the largest gold exchange-traded fund, the SPDR Gold Trust, have more than doubled in the past year.

When Gisele Bundchen demands payment in gold rather than dollars or Euros, the trade can be considered crowded.

Source: blogs.marketwatch.com
Source: news.bbc.co.uk