With few exceptions, most leading financial gurus agree that every portfolio should include some physical gold.
But while the yellow metal itself is great as a long-term hedge against turmoil and inflation, it's a lousy trading vehicle.
For shorter-term trading purposes, most gold investors look first to the futures markets, generally focusing on either the CME Group's full-size COMEX contract, which represents 100 ounces of the metal, currently valued around $165,000, or its little brother, the 50-ounce miNY gold future.
However, that can be a fairly costly proposition, with initial margin requirements on a single 100-ounce contract running in excess of $10,000.
And, as anyone who has held those contracts in recent weeks can attest, it can also be an extremely risky one.
For example, the single-day loss on a 50-ounce miNY future on Feb. 29 was $3,845, with the intraday trading range topping $5,200.
Similarly, last Wednesday's one-day decline of $51.30 an ounce in the price of the full-size April future would have cost traders on the wrong side of the move a whopping $5,130.
Even recent intraday moves have been scary.
On March 9, April gold futures plunged $27.70 an ounce shortly after the open, only to rebound and trade as much as $39.50 an ounce higher later in the day.
That swing had a total value of $6,720 – in a single 5-hour and 10-minute trading period!
So, if those numbers give you pause, but you'd still like to mine for profits in the gold market, what can you do?