June 18, 2008 at 2:00 pm by Tom Lydon
Gold exchange traded funds (ETFs) offer investors a safe haven during economic crisis.
We are experiencing a rough patch: equities are losing value, employment numbers aren’t good, inflation is rising and fixed-income is getting hit by inflation, as well. The latest market correction of 2008 has led many investors down the gold ETF path, whether they’re ETFs that hold gold futures, or ETFs that hold physical gold.
Prerna Katiyar for Economic Times reports that throughout history, the returns of equities and commodities, such as gold, have an inverse relationship. The current weak-equity position mixed with the weak U.S. dollar is being greased by rising oil prices and high inflation. These factors may lead many investors down the "yellow brick road."
Other metals are attractive in these turbulent times as well. Bear in mind that metals and other commodities can be volatile, so have your exit strategy in place.
Today, gold is sitting close to $885 an ounce. Platinum rose to $2,076, and silver is at $17.30.
ETFs you can use to get exposure include:
- SPDR Gold Shares (GLD), up 5.9% year-to-date
- iShares Comex Gold Trust (IAU), up 5.7% year-to-date
- PowerShares DB Gold (DGL), up 4.3% year-to-date
- iShares Silver Trust (SLV), up 15.2% year-to-date
- E-TRACS UBS Long Patinum ETN (PTM), launched May 9
