Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

3 Gold And Silver ETFs For Hedging Rising Inflation

By Investing.com (Tezcan Gecgil/Investing.com )ETFsNov 17, 2021 05:07AM ET
www.investing.com/analysis/3-gold-and-silver-etfs-for-hedging-rising-inflation-200608552
3 Gold And Silver ETFs For Hedging Rising Inflation
By Investing.com (Tezcan Gecgil/Investing.com )   |  Nov 17, 2021 05:07AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

So far, 2021 has not been a good year for either gold or silver bulls. Year-to-date, both precious metals are down about 2.5% and 5.5%, respectively.

Meanwhile, according to the October Consumer Price Index (CPI) released by the US Bureau of Labor Statistics, consumer prices are surging. The CPI increased by 6.2% year-over-year, the most in over three decades. And it was up 0.9% on a monthly basis.

Concern over rising inflation levels has put precious metals in the limelight as prices have edged higher in recent weeks. Depending on personal investment objectives, most financial planners typically recommend a 5% to 10% portfolio allocation in precious metals, which could act as inflation hedges.

There are different ways to invest in silver and gold, starting with buying the physical metal. Today, we introduce three exchange-traded funds (ETFs) that could appeal to readers who believe there could be further glitter in gold or silver.

1. SPDR Gold Shares

  • Current Price: $172.92
  • 52-Week Range: $157.13 - $183.21
  • Expense Ratio: 0.40% per year

SPDR® Gold Shares (NYSE:GLD) tracks the price of gold bullion. Global market forces determine the price of spot gold over-the-counter (OTC) 24 hours a day. The majority of demand for gold comes from investment and jewelry-making purposes. As we write, the yellow metal hovers at $1,867 per ounce.

GLD Weekly Chart.
GLD Weekly Chart.

The fund started trading in November 2004 and net assets stand at $58.4 billion. In fact, GLD is the largest physically backed gold ETF in the world.

Year-to-date, the ETF is down 2.4%. However, in the past month, it is up about 5%. The $180 level is likely to act as resistance in the coming days. In the case of short-term profit-taking, interested readers could consider investing around $170. We expect gold bulls will continue to have the upper hand in 2022, and $190 may well be the next target.

A side note: SPDR Gold MiniShares (NYSE:GLDM) is another similar ETF buy with a lower expense rate of 0.18% per year.

2. iShares Silver Trust

  • Current Price: $22.96
  • 52-Week Range: $19.83 - $27.98
  • Expense Ratio: 0.40% per year

iShares Silver Trust (NYSE:SLV) might appeal to investors looking to invest in silver through their brokerage accounts as opposed to buying the physical metal.

SLV provides exposure to the daily movement in the price of silver bullion. As reference, it uses the London Bullion Market Association (LBMA) silver price. Most of the global trade in bullion is based in London.

SLV Weekly Chart.
SLV Weekly Chart.

The fund started trading in April 2006, and net assets stand at $13.8 billion. So far in 2021, SLV is down about 5.4%. However, in the past month, the fund returned more than 7.5%.

Silver, like gold, is regarded as an asset to hold for investment purposes. In addition, around half of the annual demand for silver comes from industrial applications, in part due to its high levels of thermal and electrical conductivity.

In other words, economic activity and growth can easily influence the price of silver, which tends to be volatile. Buy-and-hold investors could regard the $22.5 level as a better entry point.

3. Sprott Gold Miners ETF

  • Current Price: $29.68
  • 52-Week Range: $24.35 - $32.99
  • Dividend Yield: 0.31%
  • Expense Ratio: 0.50%

This fund focuses on miners. Understandably, a rising tide typically lifts shares of most businesses in an industry. Therefore, those readers who believe gold might climb further could consider buying into gold miners through an ETF.

The Sprott Gold Miners ETF (NYSE:SGDM) invests mostly in large- and mid-capitalization gold miners. The fund started trading in July 2014.

SGDM Weekly Chart.
SGDM Weekly Chart.

SGDM, which has 35 holdings, tracks the returns of the Solactive Gold Miners Custom Factors Index. Canadian companies have a hefty 78.1% share in the fund, followed by miners based in the US (15.6%) and the UK (4.7%). Top 10 holdings comprise around 60% of net assets of $252 million.

Newmont Goldcorp (NYSE:NEM) and Franco-Nevada (NYSE:FNV) have the biggest slices with 9.72% and 9.17%, respectively. Next in line are Barrick Gold (NYSE:GOLD), Wheaton Precious Metals (NYSE:WPM) and Kirkland Lake Gold (NYSE:KL).

The fund is down by 1.6% this year, but returned more than 9.2% in the past month. Given the recent rapid run-up in price, short-term profit-taking is likely. A potential decline toward $28.5 would improve the margin of safety.

Finally, there are several other ETFs that give exposure to both gold and silver miners. Examples include:

  • ETFMG Prime Junior Silver Miners ETF (NYSE:SILJ),
  • Global X Silver Miners ETF (NYSE:SIL),
  • iShares MSCI Global Gold Miners ETF (NASDAQ:RING),
  • iShares MSCI Global Silver and Metals Miners ETF (NYSE:SLVP),
  • VanEck Gold Miners ETF (NYSE:GDX), and
  • VanEck Junior Gold Miners ETF (NYSE:GDXJ).
3 Gold And Silver ETFs For Hedging Rising Inflation
 

Related Articles

3 Gold And Silver ETFs For Hedging Rising Inflation

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
David Smith
David Smith Nov 23, 2021 3:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Tezcan Gecgil, regarding your recommendation of the SPDR gold funds, do they actually have the metal or are they just mass printed paper? How reliable are GLD's holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. I remember there was a highly publicized visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities. It would be contradictory to hedge inflation with mass printed paper gold funds like the SPDR funds.
David Smith
David Smith Nov 23, 2021 3:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The GLD prospectus fails to specify around how much of GLD's gold is insured but it does give you this clause "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." As I wanted clarification on this subject, I called GLD's info line. The GLD representative acted as if he didn't know and said they were just the "marketing agent" for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors.
David Smith
David Smith Nov 23, 2021 3:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Note on the subject of GLD's insurance, they are not at all straightforward about it. Their representatives will not confirm nor deny the existence of GLD's insurance. I recommend anyone curious about this to confirm via calling GLD's publicly listed number for general inquiries at 866 320 4053 and ask about this clause from the GLD prospectus: "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." Exactly how much of the fund is insured? They will not give you a straight answer and might even throw in some bizarre excuse which I've experienced. Why hide this information from investors?
Kristof Naessens
Kristof Naessens Nov 17, 2021 7:01AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
If you want the real physical stuff, best is PSLV, the Sprott Physical silver trust, the others are mostly deravite in nature or do not have the 100% physical backing and won't let you take your silver out.
sam Ala
sam Ala Nov 17, 2021 5:44AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
GDX, GDXU & GDXD are the best to trade for Gold miners considering the daily volume traded. The other gold miners have low volume.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email