Gold ETF Investing: Physical Or Futures?

Gold investing has been a popular choice for quite some time now. This elusive commodity has a long list on functional uses, including its abilities to act as an inflation hedge and the fact that it is often sought out as a safe haven in times of market turmoil. The popularity of this precious metal was cracked wide open with the widespread release of exchange traded funds, which allowed investors to gain exposure to their favorite metal with low costs, high liquidity, and a transparency that can be matched nowhere else in the financial world. There are now all kinds of ETPs that offer pure exposure to gold as well as basket shares of various precious metals, giving investors a wide range of choices when it comes time to make a gold allocation [see also Precious Metals ETFs: Finding The Best Fit].

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Gold ETF Analysis: Global X Pure Gold Miners ETF (GGGG)

In recent years, exchange-traded funds have become popular as vehicles for financial advisors and individual investors looking to establish exposure to gold, a precious metal that has tremendous appeal both as a means of enhancing returns and smoothing overall portfolio volatility. The most popular gold ETFs, such as GLD and IAU, offer investors direct access to the yellow metal through a physically-backed structure that includes gold bullion as the underlying holdings. But other approaches to betting on gold have also become popular in recent years; more and more investors are now electing to establish “indirect” access through stocks of companies engaged in the extraction and production of precious metals.

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Gold ETF Analyst Report: Taking A Look At GLD

The Gold SPDR (GLD) is the 800 pound gorilla in the gold ETF space; this fund has become one of the largest exchange-traded products in the world, and one of the largest holders of physical bullion (GLD’s holdings dwarf reserves of some countries). This behemoth of a fund is physically-backed, a characteristic that likely has tremendous appeal to many investors, since it avoids some of the risks and nuances associated with futures-based products. Because the underlying assets are gold bars stored in secure vaults in multiple locations, the value of GLD can be expected exhibit a near-perfect correlation to spot gold prices. That means that a position in GLD replicates the experience of holding physical gold, but without the security risks or hassles that accompany a direct position in the precious metal [see also Gold ETF Investing: Physical Or Futures?].

It is relatively easy to understand the popularity of GLD, as the unrivaled liquidity offered in this fund–it trades an average of about 25 million share per day–makes it perhaps the simplest and easiest way to achieve exposure to gold bullion. But for investors who are in the market for precious metals exposure, there are other options out there–including a product that we believe is virtually guaranteed to outperform GLD over the long run. Continue reading

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Inverse Gold ETFs: How To Bet On A Precious Metals Bubble

Gold ETFs have become some of the most popular options for investors to make a speculative play on their favorite precious metal. With unparalleled transparency, rock bottom fees, and superior liquidity, the exchange-traded structure has emerged in recent years as the vehicle of choice for all types of investors–from novices up to sophisticated hedge fund managers–to establish exposure to precious metals.

While gold has been boosted by bullish sentiment for much of the last few years, recent developments have heightened concerns about a bubble in the space. Gold prices have skyrocketed over the last few years, going from the $600 to $700 per ounce range in 2006, now to its current levels well above the $1,500 per ounce level. Just as investors looking to bet on continued price appreciation have several options for traditional long exposure to gold, those concerned about a collapse to pre-2007 levels have plenty of tools as their disposal as well. Specifically, there are a number of inverse gold options to allow investors to bet against the performance of the yellow commodity [see also Soros Sells Gold ETFs, Bad News For Precious Metal Investors?].

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Gold ETFs 101: Dozens Of Ways To Play

Gold has long been a popular investment for those looking to cash in on a laundry list of benefits offered by the precious metal. Some of these advantages include gold’s functionality as a hedging tool against inflation and uncertain markets, a diversifying agent to add stable commodity exposure to round out a portfolio, and also as a speculation vehicle for active traders. But as its price has skyrocketed in recent years, the metal has quickly become less and less accessible to the average investor who is unwilling to spend exorbitant amounts of money to gain gold exposure [see also The Ultimate Guide To Gold Investing]. Continue reading

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GLD vs. IAU: Which Gold ETF Is Best?

Gold has been a popular investment destination for decades, thanks to the appeal of this precious metal as a way to diversify portfolios, hedge against inflation and the U.S. dollar, or simply to speculate on increased interest in safe haven assets. Many big name investors, like George Soros, have long praised the benefits of gold investing and the handsome returns that it is capable of offering. But being a precious metal, gold is not easily accessible to all investors, as its price has increased significantly over the past few years, with the yellow metal holding a firm grip about the $1,500 per ounce mark for the last several months [see also Gold ETFs 101: Dozens Of Ways To Play]. Continue reading

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TBAR: Too Expensive Or A Great Bargain?

The innovation of the ETF industry has led to a wide range of products that now offer some manner of allocation to gold. Investors can gain exposure to the precious metal through a wealth of exchange traded products that allow them to play the gold as a commodity, but also as an equity investment by investing in the mining and exploration companies of gold. While the front-running ETP options have come from futures or physical based funds, there are other products that employ slightly different methodologies that investors are starting to take notice of [see also Eight Legendary Gold Investors].

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Eight Legendary Gold Investors

There is no shortage of self-described “gold bugs” in the current environment, as an increasing number of investors are adding allocations to precious metals to their portfolios and embracing gold in particular as a core holding. And those with a bullish outlook on gold aren’t simply limited to small investors storing all of their assets in gold coins or other collectibles; many managers of multi-billion dollar funds have huge positions in the yellow metal, contributing to more mainstream acceptance of this asset class as a potentially critical portfolio component:  Continue reading

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50 Excellent Tools, Resources, and Blogs For Gold Bugs

Interest in gold as an investable asset class has been gradually climbing over the last several years, with the increase attributable to a number of different factors. The impressive performance of all types of precious metals during the recent financial crisis and beyond has certainly caught the attention of investors, as those who had the foresight to establish exposure to gold have been handsomely rewarded as the metal has climbed steadily higher. Worries about long-term weakness in the U.S. dollar and upticks in inflation have intensified interest in commodities more generally and gold in particular, as identifying asset classes that exhibit low correlations to stocks and bonds has become both more challenging and more important.

While investing in a gold bar is relatively simple, there is still a great deal of confusion over the many relatively new ways to obtain exposure to the metal, as well as some of the factors that contribute to the risk/return profile. While the potential rewards of investing in gold are tremendous–as evidenced by the huge price run-ups over the last year–the risks are substantial as well. Much of this is due to the challenges with accomplishing exposure to spot prices beyond physical holdings–and misunderstandings over the alternatives, including stocks or ETFs of producing companies and futures contracts. Fortunately, there is no shortage of free resources dedicated to making this asset class easier to understand, analyze, and ultimately buy. Below, we profile 50 gold blogs, Web sites, and tools that are helpful for all walks of commodity investors, from beginners to seasoned pros (sign up for the free Gold ETF newsletter): Continue reading

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Seven Factors To Consider When Evaluating Gold ETFs

Gold ETFs are a relatively new innovation, popping up over the last several years as a tool that allows all types of investors to gain access to an asset class that has appeal for a wide variety of reasons. Gold ETFs have seen a tremendous increase in popularity since their introduction in the early 2000s, as everyone from small individual investors to billion dollar hedge fund managers have embraced the exchange-traded structure as the most efficient means of accessing precious metals. Continue reading

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