Increased Global Demand Will Support The Price Of Gold ETFs

“Gold prices over the past week have been teetering in positive, negative and somewhat uncertain territory. But there is confidence that the price of bullion will increase this year. One factor that is likely to support the price of the precious metal is the fact that central banks around the world have been hoarding the commodity and are reluctant to sell it. In fact, some bullion analysts expect the central banks of China, Russia and India to continue to gobble up gold as they move away from sovereign bonds and seek safer investments,” Kevin Grewal Reports From The Street.

Grewal goes on to say, “A second factor likely to support the price of the yellow metal is the expected increase in global demand for base metals. There is an indirect correlation between the two types of metals, and in general as the prices of base metals increase so do those of gold. Thirdly, investor appetite for safe-haven tools is expected to continue to rise as sovereign debt issues in Europe, particularly Greece, continue to make headlines and remain a concern.”
 
“Lastly, the Federal Reserve’s decision to keep interest rates at or near zero is likely to result in a loss of purchasing power, which could result in the U.S. dollar declining and make gold appealing to foreign investors and painting a macroeconomic backdrop which may support gold’s price,” Grewal Reports.

We put together a list of some Gold ETFs to play if you believe in Golds increased global demand below:

LONG:

The investment (GLD) seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. The gold held by the trust will only be sold on an as-needed basis to pay trust expenses, in the event the trust terminates and liquidates its assets, or as otherwise required by law or regulation.

The investment (GDX) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the AMEX Gold Miners index. The fund generally normally invests at least 80% of its total assets in common stocks and American depositary receipts (ADRs) of companies involved in the gold mining industry. The fund is nondiversified.

The Funds (GDXJ) investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Junior Gold Miners Index (the “Junior Gold Miners Index”). For a further description of the Junior Gold Miners Index, see “Junior Gold Miners Index.”

The objective of (SGOL) the newly listed shares is to reflect the performance of the price of Gold bullion, less the Trust’s operating expenses. The Trust is open ended and is designed for investors who want a cost-effective(1) and convenient(2) way to invest in Gold as well as diversify their Gold holdings.

The investment (UGL) will seek to replicate, net of expenses, twice the performance of gold bullion as measured by the U.S. Dollar p.m. fixing price for delivery in London. The fund normally invests assets in financial instruments with economic characteristics twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective.

The investment (DGL) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Liquid Commodity Index – Optimum Yield Gold Excess Return. The index is a rules-based index composed of futures contracts on gold and is intended to reflect the performance of gold.

The investment (DGP) seeks to replicate, net of expenses, twice the daily performance of the Deutsche Bank Liquid Commodity index – Optimum Yield Gold Excess Return. The index is intended to reflect changes in the market value of certain gold futures contracts and is comprised of a single unfunded gold futures contract.

The objective (IAU) of the trust is for the value of its shares to reflect, at any given time, the price of gold owned by the trust at that time, less the trust’s expenses and liabilities. The trust is not actively managed. It receives gold deposited with it in exchange for the creation of baskets of iShares, sells gold as necessary to cover the trust’s liabilities, and delivers gold in exchange for baskets of iShares surrendered to it for redemption. The trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act.

SHORT:

The investment (DZZ) seeks to replicate, net of expenses, twice the inverse of the daily performance of the Deutsche Bank Liquid Commodity index – Optimum Yield Gold Excess Return. The index is intended to reflect changes in the market value of certain gold futures contracts and is comprised of a single unfunded gold futures contract.

The investment (GLL) will seek to replicate, net of expenses, twice the inverse daily performance of gold bullion as measured by the U.S. Dollar p.m. fixing price for delivery in London. The fund normally invests assets in financial instruments with economic characteristics inverse to the index. It may employ leveraged investment techniques in seeking its investment objective.

Related posts:

1. A glance at 50 of the most in-demand listed gold stocks, busy running away from the rest of the global investment universe.
2. Gold ETFs Are In Jeopardy As The Price Of Gold Could Retrace Below $1000
3. Gold ETF’s Hold Steady As Gold Finds Support (GLD, IAU, DGL)

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