Gold ETF’s Hold Steady As Gold Finds Support (GLD, IAU, DGL)
“Gold prices typically move in the opposite direction from the U.S. dollar, and as the value of the U.S. dollar has risen during the past few weeks, gold prices have fallen back down to support at $935 per ounce, the 23.6% Fibonacci retracement level. This recent movement can’t have been encouraging for investors in (GLD). However, while the most recent price action would indicate gold may be trying to break down lower, I anticipate this current support level will hold,” Learning Markets Reports.
“There are many factors that affect the supply and demand for gold. It is a shelter against inflation and will typically rise in prices when the USD is inflating or falling in value compared to other major currencies. Like most commodities it can also rise in price during economic expansions and will often decline during contractions with other commodity prices. Investors can take advantage of changing gold prices using a variety of exchange-traded funds (ETFs) such as the SPDR Gold Trust (GLD), the iShares COMEX Gold Trust (IAU) and the PowerShares DB Gold Fund (DGL),” Learning Markets Reports.
The investment (GLD) seeks to strive to reflect the performance of the price of gold bullion, less the Trustâs expenses. The Trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. The gold held by the trust will only be sold on an as-needed basis to pay trust expenses, in the event the Trust terminates and liquidates its assets, or as otherwise required by law or regulation. The Trust is not managed like an active investment vehicle, and it’s not registered as an investment company under the Investment Company Act of 1940.
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The objective of the trust (IAU) is for the value of its shares to reflect, at any given time, the price of gold owned by the trust at that time, less the trust’s expenses and liabilities. The trust is not actively managed. It receives gold deposited with it in exchange for the creation of baskets of iShares, sells gold as necessary to cover the trust’s liabilities, and delivers gold in exchange for baskets of iShares surrendered to it for redemption. The trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act.
The investment (DGL) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Liquid Commodity Index – Optimum Yield Gold Excess Return. The index is a rules-based index composed of futures contracts on gold and is intended to reflect the performance of gold. The fund is nondiversified.
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