Gold prices have been struggling over the past coupe of months as equities have picked up steam and set their sights on historic highs. As such, many investors have moved out of gold and into equities, looking to cash in on the currently bull market. This trend can be easily demonstrated by the SPDR Gold Trust (GLD), which holds physical gold bullion. The fund has lost more than $4.7 billion in assets in 2013, though it still remains the second largest ETF in the world [for more gold news and analysis subscribe to our free newsletter].
Gold is not only one of the most popular commodities in the world, but it is also one of the most widely traded financial instruments. Traders and investors utilize gold for its safe haven behaviors, its speculative power, and its high liquidity given its popularity. Some use futures contracts for gold exposure, while others prefer stocks. But recent years have seen exchange traded funds (ETFs) fall into the mix. These highly liquid and transparent assets have democratized gold investing so that even the smallest of investors can still maintain a healthy exposure to the precious metal. Below, we outline five facts about gold ETFs to help you get a better understanding of these products [see also Were Gold and Silver Manipulated Alongside LIBOR?].
It’s an argument that seems to have no end: is gold really overvalued? There are two distinct sides to this story, and the controversy has been heating up since the precious metal made its historical run in 2011. As a number of factors combined midway through last year, gold was able to soar to its highest price in history, briefly touching the $1,900/oz. mark. The hard asset had risen so quickly, that breaking through the $2,000 barrier seemed like a certainty for many. But what goes up must come down, and gold was no exception. With prices now stuck in a rut around $1,600/oz., investors are continuing the age old argument as to whether or not this commodity is worth its salt [see also Three Reasons Why Gold Is Overvalued].
Gold is one of the rarest metals in the world, and has a long history as a valuable and intensely sought-after element. Gold has served as the basis for physical currency for thousands of years, and many monetary systems throughout human history have utilized a gold standard that focused on the precious metal. Exploration and production of gold has become a major industry in regions that maintain significant deposits of the metal, and quests for gold have been the impetus of countless expeditions and discoveries. The price of the metal is widely followed by many investors, both sophisticated and simplistic. There are a number of different options for investing in gold, including buying up coins and bars of the product, exchange-traded futures contracts, stocks of companies engaged in the extraction and sale of the metal, and both physically-backed and futures-based exchange-traded products [see also The Guide To The Biggest Companies … See the full story here →