PostHeaderIcon Understanding Gold ETF’s

Gold Bars

A gold exchange traded fund is a special type of ETF that tracks the price of gold in the markets. As an ETF, this type of investment is traded similar to a share of stock among the many stock exchanges around the world. It is a relatively new type of investment option, having been launched initially sometime in 2003. It has since been followed by other types of gold ETFs being offered in other markets across the globe.

Gold ETF Advantages

Gold as a precious metal has been long known as a valuable resource. Its value as an investment has been widely recognized and accepted everywhere. This makes it quite an attractive investment to add into one’s portfolio. Here are some of the other advantages that investing in gold ETFs offers.

Supply And Demand

One of the advantages of investing in gold and gold ETFs has to do with a basic rule in economics- the law of supply and demand. Gold production from new mines has relatively diminished as a result of lesser demand from global central banks. The ensuing effect may lead to gold having increased prices with the supply decrease if demand for it coming from other markets come up.

And because of its widely regarded intrinsic value, new emerging market countries have largely been putting their money on buying more and more gold. Not only that, the recent interest that many investors have been showing on commodity investments may likely also drive demand further for gold.

Portfolio Diversification

Investing in gold ETFs can be a good way to diversify a portfolio. Diversifying usually involves investing in various investments that are not correlated to one another. For such a portfolio, investing in gold might be a good option to add into a stock and bonds investments. The gold investments can help strike up a balance volatility and risk to make the portfolio stronger and more stable.

Economic Uncertainties

With the global recession affecting various markets today, people are looking to invest in a more stable commodity to safeguard their capital or funds. More investors are looking towards investing in gold since it seems little affected by the downturn of the different economies and markets worldwide.


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