Demand for alternative investments, such as commodity exchange traded funds (ETFs), is rising. Gold rose to a 27-year high as the dollar sank to a record low to the euro. Claudia Carpenter for Bloomberg explains that as investors seek a hedge against inflation, bullion has advanced 15% this year.

Some experts predict that gold might rise to $800 by the end of the year. Gold ended the week at $736.20 an ounce. Gains occurred this month on a weak dollar and speculation that investors were seeking a safe haven from U.S. subprime mortgage losses. Gold has risen 9% so far this month and the ETFs that track gold have benefited:

• streetTracks Gold Shares Fund (GLD) – up 10.6% for the past month and 14.5% year-to-date
• iShares Comex Gold Trust (IAU) – up 10.4% for the past month and 14.4% year-to-date
• PowerShares DB Gold (DGL) – up 10.5% for the past month and 11.5% for the last three months as it was launched in early 2007. It invests in gold futures not the bullion.

Tags: Commodity ETFs, DGL, GLD, IAU, Metals & Mining