Gold has been a stellar performer for not just precious metals, but for real assets in general. With more market uncertainty permeating throughout the capital markets, the precious metal’s rally past $2,000 is alive and well, but can it maintain its mojo?
“Gold prices extend rally Tuesday, with the precious metal regaining traction to settle above the psychologically significant level at $2,000 for the first time in about a week amid persistent weakness in the U.S. dollar and slack in government bond yields,” a MarketWatch report noted. “December gold GCZ20, -0.36% GC00, -0.36% settled up $14.40, or 0.7%, at $2,013.10 an ounce. The 10-year Treasury note yield TMUBSMUSD10Y was trading around 0.66%, around its weakest level since last week, while the dollar was at its lowest since 2018, trading 0.6% lower at 92.29, as gauged by a gauge of the buck, the ICE Dollar Index DXY, +0.02%, against a half-dozen rival currencies. A weaker dollar can boost the appeal of gold because it is priced in the currency while receding yields can lower the opportunity cost of favoring bullion, which doesn’t offer a yield, over Treasurys.”
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.
Other Real Assets Aside from Gold
In addition to gold, investors can diversify their portfolios further with real assets using other ETF options. Here are a couple of ETFs to look at, including one that offers a broad range of real assets:
- FlexShares Global Quality Real Estate Index Fund (GQRE): seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Northern Trust Global Quality Real Estate IndexSM. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to quality, value, and momentum factors relative to the Northern Trust Global Real Estate Index.
- FlexShares Real Assets Allocation Index Fund (ASET): seeks investment results that correspond generally to the price and yield performance of the Northern Trust Real Assets Allocation IndexSM. The underlying index measures the performance of an optimized allocation to the underlying funds that is intended to provide exposures to certain real assets and minimize the overall volatility of an investment in the underlying funds.
For more market trends, visit the ETF Trends.