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.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.