Look for growing gold strength in the iShares Core MSCI Emerging Markets ETF (IEMGand the iShares Gold Trust (IAU).

“Economic recovery in emerging markets will support consumer demand for gold in 2021, according to a report by the World Gold Council (WGC). Global gold production may also rise after a decline in 2020,” a TASS article said. “According to the report, investment in gold will remain well supported, while gold consumption should benefit from the ongoing economic recovery, especially in emerging markets.”

IEMG seeks to track the investment results of the MSCI Emerging Markets Investable Market Index. The index is designed to measure large-, mid- and small-cap equity market performance in the global emerging markets.

IEMG offers investors:

  1. Exposure to a broad range of emerging market companies
  2. Low cost, comprehensive access to stocks in emerging market countries
  3. Use at the core of a portfolio to diversify internationally and seek long-term growth

IEMG Chart

Generally, IAU seeks to reflect the performance of the price of gold. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities.

The Trust does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of gold. The advisor intends to constitute a simple and cost-effective means of making an investment similar to an investment in gold. An investment in physical gold requires expensive and sometimes complicated arrangements in connection with the assay, transportation, warehousing, and insurance of the metal.

Per the fund’s website, IAU provides investors with:

  1. Exposure to the day-to-day movement of the price of gold bullion
  2. Convenient, cost-effective access to physical gold
  3. Use to diversify your portfolio and help protect against inflation

IAU Chart

How Gold Can Respond to Global Upside

Despite the recent weakness, the World Gold Council still expects gold to respond to the upside in 2021. For one, central bank demand should help prop up gold prices.

“Investment in gold will respond to interest rates and inflation” the WGC said. “In addition, central bank demand for gold will remain as they continue to include gold in their international reserves, which, combined with low interest rates, maintains gold’s appeal.”

“Gold has become one of the most profitable main assets in 2020, and gold production is expected to recover this year after the decline seen in 2020” the report added.

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