Gold prices ticked higher during Thursday’s trading session as the flash U.S. manufacturing Purchasing Managers Index for April fell to 36.9, which represented an 11-year low, according to research firm IHS Markit said in its latest report. Market experts were forecasting a reading of 38.0.
“Manufacturers recorded the sharpest fall in sales since the depths of the financial crisis in early-2009,” the IHS Markit’s news release stated. “Private sector firms in the U.S. signaled an unprecedented decline in business activity in April, with manufacturing and service sector companies registering marked contractions of output amid the outbreak of coronavirus disease 2019 (COVID-19).”
Amid the coronavirus outbreak, the service sector PMI reading fell to 27.0 in April, which was the quickest contraction on record. A reading of 50 is a sign of expansion, while a number below that represents a contraction.
“Services companies registered the steepest rate of decline in the survey’s history,” the report said. “The cancellation and postponement of orders led firms to reduce their workforce numbers at a rate far exceeding anything seen previously over the survey history at the start of the second quarter.”
Investors looking to get gold exposure can look at funds like SPDR Gold Shares (NYSEArca: GLD) and the SPDR Gold MiniShares (NYSEArca: GLDM). Precious metals like gold offer investors an alternative to diversify their holdings, and like other commodities, gold will march to the beat of its own drum compared to the broader market.
Traders looking for leverage can use funds like the Direxion Daily Gold Miners Bull 3X ETF (NYSEArca: NUGT), VanEck Vectors Gold Miners (NYSEArca: GDX) and the Direxion Daily Jr Gold Miners Bull 3X ETF (NYSEArca: JNUG).
In addition, here are a pair of other gold funds to look at:
- iShares Gold Trust (IAU): seeks to reflect generally 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.
- Aberdeen Standard Gold ETF Trust (SGOL): seeks to reflect the performance of the price of gold bullion, less the Trust’s expenses. The Shares are intended 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. Although the Shares are not the exact equivalent of an investment in gold, they provide investors with an alternative that allows a level of participation in the gold market through the securities market.
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