Will Gold Lose Its Luster for the Rest of 2020?

Gold certainly had its run during the uncertainty of the Covid-19 pandemic, but as more economies around the world look to return to normal, the precious metal could lose its luster for the rest of 2020. That, however, could pose a buying opportunity for investors looking for gold exposure.

“We still expect that the price of gold will ease back in the remainder of 2020. Although ultra-low real yields and a somewhat weaker U.S. dollar will keep the gold price elevated, safe-haven demand will be more subdued as economic activity picks up,” said Capital Economics chief commodities economist Caroline Bain, per a Kitco News article.

“In a nutshell, we now expect a somewhat sharper rebound in economic activity in the months ahead, which should bolster riskier assets but weigh on the U.S. dollar,” Bain pointed out.

Investors who want gold exposure can look at funds like the popular 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.

In addition to GLD and GLDM, here are a pair of other gold funds to look at:

  1. 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.
  2. 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.

Leveraged funds aren’t an ideal tool for retirees to utilize, but for short-term 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).

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