Sunday, June 15, 2008

How to invest in gold.

Falling US dollar and financials turmoils attract more and more attention to commodities investments especially to gold. Not surprisingly SPDR Gold Trust (GLD) has the biggest assets growth among top 10 largest ETF. Year to year the growth is 60%. In near future this ETF will be bigger than iShares S&P 500 (IVV) or PowerShares QQQ (QQQQ).

I have already posted potential ways how to invest in crude oil by using ETF. In fact I've published all ETFs (listed on US exchanges) underlying crude oil assets. Either futures contracts or companies from oil industry.

Today I would like to focus on precious metal ETF underlying gold.

SPDR Gold Trust (GLD) - ETF underlying raw price of gold on 1:10 price ratio.
iShares COMEX Gold Trust ETF (IAU) - Exactly the same like GLD also with the same performance.
PowerShares DB Gold Fund (DGL) - Tracking DB liquid commodity index - Optimum Yield Gold.
Market Vectors Gold Miners ETF (GDX)
- This Van Eck's ETF tracks rather some gold mining stocks than the commodity. The biggest constituents are Barrick Gold Corp. (ABX), Gold Corp. (GG) and Newmont Mining Corp. (NEM).

As you can see from the chart winning strategy for last 12 months was just to follow up the price of gold. GLD and IAU are the same and the best performance among gold ETF.

Early this year Deutsche Bank (DB) launched exchange traded notes ETN tracking their Optimum Yield Gold index. What is great is that these three ETN's can be used in IRA's for long or short trading styles because of some immediate inverse in the ETN. Also Investors can make leveraged strategies based on the ETN.

DB Gold Double Short ETN (DZZ)
DB Gold Double Long ETN (DGP)
DB Gold Short ETN (DGZ)

Disclosure: Author doesn't have any holdings in gold ETFs or related companies in this post


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