A Declining US Dollar Continues To Send Gold ETF’s To New Highs
“The gold price continued its advance to new all-time highs, buoying gold mining stocks as investors sought refuge from the potential inflationary consequences of global policy makers renewing their commitment to expansionary fiscal and monetary policy at this past weekend’s G20 meeting. After the gold price traded to a high print of $1,011.20 in early morning trading, it held steady throughout the course of the day, closing up $7.62 to $1,103.37 per ounce,” Gold Alert Reports.
“Gold mining stocks rallied in concert with higher gold prices, as the Market Vectors Gold Mining ETF (GDX) rose $1.66, or 3.5%, $49.28, a new 52-week closing high trading at its highest level since March of 2008. Gold mining stocks, after lagging the appreciation in the price of gold, have been catching up, delivering the leverage to the gold price that many promised to investors. The GDX closed higher for the sixth consecutive day, posting a 16.3% gain in November,” Gold Alert Reports.
“A declining U.S. Dollar, which as measured by the Dollar Index (DXY) fell to a new 52-week low, provided a tailwind for gold-related investments. Declining risk aversion fueled the initiation of the further dollar carry trades, whereby investors use low-yielding U.S. dollars to fund other higher yielding, and riskier, asset classes,” Gold Alert Reports.
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Here is a look at the two most popular Gold ETF’S below:
The investment (GLD) seeks to replicate the performance, net of expenses, of the price of gold bullion. 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 investment (GDX) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the AMEX Gold Miners index. The fund generally normally invests at least 80% of its total assets in common stocks and American depositary receipts (ADRs) of companies involved in the gold mining industry. The fund is nondiversified.
|TOP 10 HOLDINGS (GDX) ( 67.60% OF TOTAL ASSETS)|