Another £1000 on PHAU gold ETF... bad move?

I just bought another 10 ETF Securities physical gold shares (London Stock Exchange ticker PHAU). I bought them on Monday 12 December 2011 around 3pm. That means my total holdings of PHAU now stands at 28 shares. All together these 28 shares cost me £3,057.62 to buy but are now worth £2,939.34 - down 3.87%.

The shares I bought on Monday cost £104.58 each before fees or £1,057.74 in total (after fees).

That is the cheapest I've managed to buy at so far but it is far from clear that this was a good move!

There seem to be lots of different arguments over whether the gold price will go up or down from here. At some points today PHAU and PHGP were down 3%.

On 4 November 2012 I bought 10 shares for £108.01 each at a total cost of £1,092.10.

The first time I bought was on September 22 when I bought 8 shares for £111.98 (before fees), at a total cost of £907.78 (after fees).

Two ideas.

I'm going to find out what happens if I step up my trading. At the moment I do one or two trades a month. This is a good thing in terms of keeping costs down but it means that I don't know yet what it's like to sell. I think that could be a big problem if I find out I'm afraid of selling when the gold price starts moving downwards. If each trade makes money - or the overall effect is money making then there's an option to carry out 10 trades before the end of December which will mean that the costs of trading will fall to £8.95 per trade through January. If I think I'm getting anywhere with it I can then shift up to 20 trades per month (unlikely as 20 times £8.95 is £179) which would push trading costs down to £5.95 each. It may become very obvious that this isn't a good idea very quickly - or that may be I need a more volatile asset to trade to make it worthwhile.

The second plan is to find a decent US fund that might help offset the euro/sterling problems that a UK gold ETF investor has. But it might take some work just to explore whether this option will actually help.

Should I trade my gold ETF?

On Wednesday I got my first emailed note from Moneyweek's John C Burford. It said that thegold price was about to drop. And so it did. Then on Friday he sent another one saying he thought it would drop further. And it did.

The system he uses doesn't look impossibly complicated but should a small-time physical gold ETF investor like me consider using these kinds of methods?

By the end of last week my gold holding was down 3%. It has certainly looked worse but that's no excuse to sidestep the thorny subjects of how, why and when to sell.

The numbers I'm dealing with mean that there has to be some pretty big moves to justify incurring the £11.95 transaction fees from Hargreaves Lansdown. The moves forecast by Burford may have justified it (assuming I timed it right): I'd have got £1977 for my ETFS Physical Gold ETF at 14:20 on 9 Nov 2011.

By 4pm November 10 Hargreaves Lansdown would have paid me £50 less, £1,927 for my 18 gold shares.

As someone who is investing for the long term I feel that any sale should be followed - hopefully fairly quickly - by more buying. And, more importantly, the buying and selling should happen whether a trade works or not.