Gold has holding ground at the $1,700 per ounce price level as of late and market analysts like Elliott Management think it has more room to stretch its legs, given that it’s “one of the most undervalued assets.”
Based on a Kitco news report, the firm “made the claim in a letter to investors, the Financial Times reported last week. The firm, which manages around $40 billion in assets, has made 2% gains in the first quarter, citing its gold positioning, the FT said.”
“The reasons for such an optimistic outlook on gold included a ‘fanatical debasement of money,’ a global low interest rate environment, and mining disruptions due to the COVID-19 outbreak, the letter reportedly stated. Singer’s view also includes a significant drop in stocks,” the report added. “Elliott Management is far from being the only investment firm that is focusing on gold right now. Caixin Associates and Dymon Asia Capital are among many that have placed their bets on gold and have come out on top this year, the FT said in its report.”
A few gold-backed exchange-traded funds (ETFs) to consider:
- GraniteShares Gold Trust (BAR): seeks to reflect generally the performance of the price of gold. The Shares are intended to constitute a simple and cost-effective means of making an investment similar to an investment in gold.
- Perth Mint Physical Gold ETF (AAAU): seeks to provide investors with an opportunity to invest in gold through shares, and have the gold securely stored by the Custodial Sponsor; reflecting the performance of the price of gold less the expenses of the trust’s operations is the secondary consideration. The trust holds London Bars and Physical Gold of other specifications without numismatic value. It receives gold deposited by Authorized Participants in exchange for the creation of Baskets and delivers gold to Authorized Participants in exchange for Baskets surrendered to it for redemption.
- VanEck Merk Gold Trust (OUNZ): seeks to provide investors with an opportunity to invest in gold through the shares and be able to take delivery of physical gold in exchange for those shares. The Trust’s secondary objective is for the shares to reflect the performance of the price of gold less the expenses of the Trust’s operations. Each share represents a fractional undivided beneficial interest in the Trust’s net assets. The Trust’s assets consist principally of gold held on the Trust’s behalf in financial institutions for safekeeping.
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).
For more market trends, visit ETF Trends.