It’s no secret that as the dollar declines, gold and gold-related exchange traded funds (ETFs) generally benefit. That’s just one reason to consider investing in gold, according to Alexander Green for Commodity Online. Here are five other reasons why:
- Investing in gold can help protect against inflation.
- China and India, which are two countries experiencing a rapidly growing middle class, have an increasing demand for gold. Jewelry fabrication was up more than 50% in India alone last year.
- Gold supplies are dropping. The discovery of gold worldwide has declined.
- Gold tends to be reliable. Sure, there’s always a new hot area to invest in, but gold is often viewed as a safe haven during times of political or economic calamity.
- The trends speak for themselves. Gold-related ETFs all are above their long-term trend lines (200 day moving averages).
A few different options are available to invest in gold for those investors who are interested. Most people think of investing directly in gold bullion or gold futures. However, another way to invest in gold that sometimes gets overlooked is through the Market Vectors Gold Miners ETF (GDX). This ETF tracks the AMEX Gold Miners Index and owns all of the world’s leading gold and silver mining companies. That means investors can capture the performance of an entire sector in a single, well-diversified investment. Currently, GDX is up 11.8% year-to-date.
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.