The gold market is off to a great start in 2018, and the current rally in price could have room to run. Aside from watching the market move sharply higher in recent trade, there was another development that could be worth noting: The gold ETF, SPDR GLD, climbed for 11 consecutive sessions before finally seeing a down day last Wednesday. GLD is the largest gold-backed ETF.
Why is this worth paying attention to? This would seemingly be indicative of significant inflows finding their way into the gold market, and such inflows have the potential to continue the current ascent in price. Many investors who are looking to gain exposure to the gold market will use such paper assets in order to try to capitalize on higher prices or for diversification purposes.
Although the rising ETF price and strong win streak is significant, ETFs and other related products do have a serious flaw: They don’t equal gold in your pocket. Many investors seem to believe that buying shares of a gold-backed ETF or perhaps shares in miners can give them the possible benefits that come with gold ownership.
This is a false assumption that could potentially be costly…
Yes-you can potentially profit if you purchase GLD at $120 and it goes to $125. Yes-you can potentially use such asset classes as a means of diversification. Yes-such products may be designed to “track” the gold market. At the end of the day, however, these assets are all paper and thus all carry counterparty risk. Not only that, but higher potential prices are not the only reason to participate in the gold market, and real returns made from such products could be eroded by weakening currency values.
Physical gold, on the other hand, carries zero counterparty risk. It cannot go bankrupt, default, or be suspended due to accounting irregularities. Not only that, but physical gold can also be used as a medium of exchange anywhere in the world. It is considered by many to be the only true form of money around the globe, and has a very long history as a store of wealth and value.
Paper assets will not be much help in the face of a major currency or geopolitical problem.
Just try to buy food or a gallon of gas with a share of GLD or a mining stock. You will probably not get very fair.
The only real way to enjoy the potential benefits of gold is to own real, physical gold. The kind you can hold in your hand, and even use to transact with if need be.
Adding this asset class to your portfolio has never been easier than it is today, and you can get started by simply picking up the phone.
Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our associates are here to answer your questions, and can even show you how to incorporate this key asset class using your IRA account.
Don’t wait for the next major stock market collapse, rampant inflation or geopolitical crises before taking action. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started today.Tags: advantage gold, counterparty risk, diversification, etf, gold, gold rally, spdr gld