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2 Gold ETFs to Protect Against Inflation

Published 05/24/2021, 03:37 PM
Updated 05/24/2021, 04:30 PM
© Reuters. 2 Gold ETFs to Protect Against Inflation

Because rising stock market volatility, a weakening U.S. dollar and inflation concerns are expected to drive the demand for gold as a haven for value, it could be wise to bet now on gold ETFs SPDR (GLD (NYSE:GLD)) and VanEck Vectors (GDX). Read on.Gold prices have rebounded off their March lows on continued concerns over rising inflation, a weakening U.S. dollar, and stock market volatility. Indeed, gold prices are up for the eighth straight day. The rising demand for the precious metal is driven primarily by the yellow metal’s ability as a hedge for investors against inflation and current market volatility.

Investors’ rising interest in gold is evidenced by the SPDR Gold Trust ETF’s (P:GLD) 4.7% returns over the past month versus the SPDR S&P 500 Trust ETF’s (SPY) 0.3% decline.

Because rising consumer spending on the back of an improving job market could lead to further increases in consumer prices, demand for gold as a hedge should rise further. As such, we think it could be wise to invest now in GLD and VanEck Vectors Gold Miners ETF (NYSE:GDX).

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Latest comments

"bet now on gold ETFs SPDR GLD" Nimesh Jaiswal, isn't it a bit hypocritical to talk about inflation concerns and turn around recommending a mass printed paper gold fund? GLD makes the claim that it is completely supported by physical gold yet it denies your every day investors the right to exchange for any of their listed 'gold'. This alone means GLD shares are just paper by the day's end. Moreover, GLD's prospectus is loaded with weasel clauses that lets the trust get away without the promised gold. See the section of the prospectus that states GLD has no right to audit subcustodial gold possessions. Why does this audit loophole exist? I remember there was a well documented 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 any relevant bar lists. This "GLD" bar was later discovered to be owned by ETF Securities.
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