Bet on investment in gold?An ETF for precious metal bulls

(This article was originally written in English on March 8, 2021 and translated into Spanish for this edition)

Until now, 2021 has not been a good year for gold bulls.So far this year, precious metal has fallen more than 10%.The year began in around 1.$ 900 per ounce and is currently a short distance from 1.700 dollars.

That is very far from its maximum intradic of almost 2.075 dollars recorded in early August 2020.In fact, the little profitability of the last 12 months is barely approaching 2%.

Given the falls observed in recent weeks, market participants wonder if March could be a timely time to invest in precious metal.Therefore, today's article analyzes the drivers of the price of gold and presents a negotiated fund in the stock market (ETF) for gold bulls who could bet on a reversal in the coming months.

Factors that influence the price of gold

Human beings have highly valued gold for centuries, and raw material has acted as a wealth warehouse, as well as a means of exchange.In times of economic uncertainty and greater volatility, a safe shelter is considered.

The performance of the shares is usually negatively correlated with the gold.Precious metal tends to do well when there is fear in shares markets.However, since March 2020, this relationship has not been fully maintained.In recent days, many actions have been volatile and have been subject to great pressure. El siguiente gráfico muestra el descenso del S&P 500 desde mediados de febrero.

For example, Dirk G's research.Baur of the University of Western Australia stands out:

"September and November are the only months with positive and statistically significant changes in the price of gold.This "autumn effect" remains unconditionally and conditioned to several risk factors...The anomaly can be explained with the demand for coverage by investors in anticipation of the "Halloween effect" on the stock market, the demand for gold jewelry of the wedding season in India and the decrease in the confidence of the confidence of theinvestors due to a shorter summer schedule ".

However, another investigation concludes that positive monthly yields were mainly observed in August, September, February and April.If we observe a long -term gold chart we will see that there are not two potentially equal years.

Therefore, we believe it would be difficult to train some expectations about the price of gold in 2021 simply by analyzing the monthly returns of 2020.In that context, here is our background.

How to Heal A Swollen Eyelid Sounds Good

— Julian Hinton Mon Dec 05 03:15:58 +0000 2011

SPDR Gold Shares

Current price: 159.14 dollars

52-week range: 136,12-194.45

Expenditure ratio: 0.4% per year

The SPDR® Gold Shares Fund (NYSE: GLD) has gold bullion, the only asset of ETF, in addition to some cash.The fund began operating in November 2004, and assets under management exceed 58.000 million dollars.In recent weeks, the fund has registered regular exits.

In the last 12 months, the GDL has risen about 1%.However, in 2021, more than 10% has dropped.In other words, the ETF price closely follows the price of gold in cash.

It is likely that the level of $ 150 acts as support and the level of $ 165 as resistance in the coming weeks.If the bulls have an advantage, then the level of 170 dollars could well be the next objective.We believe that in March the metal will remain between $ 150 and $ 160.Analysts are divided over the next movement by 2021.After a period of consolidation that could last weeks, we believe that the next movement will be upward.

Although it is not possible.

In conclusion

Our discussion has shown that many factors influence the price of gold.As a result, it is not an easy asset to value.Interest in short -term traders gold usually increases and decrease.But for many long -term investors, gold will probably remain attractive as part of its portfolios in 2021.

Financial advisors generally suggest allocate between 5% and 10% of an investment portfolio to precious metals, such as gold.In addition to buying a fund like the GLD, maintaining physical asset is a possibility.

Having some gold through investment in mining companies could also be an alternative way to stay ahead of the curve.An upward movement of raw material would translate into profits for mining actions.

Several ETFs focus on gold mining companies, for example:

ETF ISHARES MSCI GLOBAL GOLD MINERS (NASDAQ: RING),

ETF Vaneck Vectors Gold Miners (NYSE: GDX),

ETF Vaneck Vectors Junior Gold Miners (NYSE: GDXJ).

(Note: If you are interested in the financial products you mention in the article and cannot locate them in your region, you may be able to consult your broker or financial manager)).