Gold ETFs to Hedge Volatility While USD Strengthens

Consequently, as negative rates in Europe and Japan drag on their respective currencies, gold will look more attractive to both regions’ investors. However, some bullion strategists warn that a strengthening U.S. dollar could cap gold gains.

On the other hand, ETF investors can utilize euro- and yen-denominated gold ETFs to capture bullion moves while the dollar strengthens. For example, the AdvisorShares Gartman Gold/Euro ETF (NYSEArca: GEUR) is an actively managed ETF that tracks gold in euro terms. The AdvisorShares Gartman Gold/Yen ETF (NYSEArca: GYEN) tracks gold in yen terms.


Both GEUR and GYEN and “offer investors an alternative method to invest in gold by financing gold purchases in liquid currencies other than the U.S. dollar,” according to AdvisorShares.

The Gold/Euro and Gold/Yen ETFs utilize exchange-traded currency futures or “over-the-counter” foreign exchange forward contracts with maturities under six months to borrow their respective currencies to fund the gold purchases.

Gold in Japanese yen terms has gained 5.2% to JPY4,285 per gram year-to-date while gold in euro terms has increased 11.2% to EUR1,088 per troy ounce.

Year-to-date, GEUR was up 13.4% and GYEN was 7.8% higher.