Are Gold ETFs Worth Investing In?
Firstly we should combing through the varieties of gold that can be invested in.
Physical gold, gold jewelry, paper gold, gold stocks, gold futures, gold ETFs.
There is a seesaw effect between the dollar and gold, but it doesn't always work. In the long run, after all, gold is a kind of hedge against the value of the tool, the rise and fall or according to the current international economic and political stability of the situation to see . Since New Year's Day, the price of gold has been rising, almost without stopping, and those who started with gold on New Year's Day should already be happy.
If you missed the best time to get into gold years ago, it's not too late to get in, and over the next 5 to 6 months, gold will move Still gratifying. There are two best times to plant trees, one 10 years ago and the other now. We all know, gold is not a best investment, but one of the best hedging tools, although gold is denominated in dollars, but it is The seesawing effect with the dollar, however, doesn't always work. Judging the rise and fall of gold, the key point is not the dollar, but the whole world environment of politics, economy, national stability, etc. Multiple factors. Along with a strong dollar, gold should theoretically fall, but after a short decline, gold rose strongly. The economic logic behind this is clearly related to the world situation: for example, Trump averaged 2 new policies per day, but was scolded; then again As Europe enters an election period, the future of the EU is not yet known; another example is Mongolia, which once had a 17% growth rate and is now deeply in debt, like It is unknown how many more times this will happen in 2017. The world is stable, but it's also volatile. The most taboo thing to predict the rise and fall of gold is absolute standardization, the rise and fall of gold by too many factors, absolutely can't because a It is a wrong investment decision to make a unilateral decision about the future of gold based on a single factor.
In conjunction with finance, I've summarized some of the major factors affecting the price of gold for your consideration. Again, a reminder that with regard to the rise and fall of the gold price, it is important to look at a combination of.
Determining the possible factors affecting the price of gold
1, the dollar trend of gold and the dollar there is a seesaw effect, generally speaking is the dollar up, gold prices down, and vice versa, gold prices up, but this situation is not always effective, we have said before.
2, war and political turmoil as an internationally recognized period of trading medium, the preservation of the value of gold will be highlighted, turbulent period of the country is not stable, economic development would be limited, any local currency could be affected by this ripple and devalue or otherwise, and people would then put the Eyes on gold, the price of gold naturally rises. The U.S. dollar also has a safe-haven character. Therefore, this factor can never simply be used as a prediction standard for gold price changes.3, the world financial crisis brought about by the financial crisis Therefore, this factor should never be used solely as a predictor of gold price changes.
3、The economic turmoil brought about by the world financial crisis, the effects of which are self-evident when the financial systems of the United States and other major Western countries appear In times of instability, the world's money turns to gold for a safe haven, and the price of gold rises. Usually during periods of stable economic development, gold is undervalued due to its liquidity constraints, etc., and the price of gold falls.
4, inflation gold has the value-preserving properties, when the country has severe inflation, prices rise across the board, currency devaluation, hold cash on the It no longer makes sense, at which point people purchase gold, causing the price of gold to rise. Especially in major Western countries, mainly the United States, the higher the inflation, the greater the demand for gold, and the natural increase in the price of gold. However, some small countries such as Uruguay and Chile have very little impact on the price of gold.
5, oil price of gold itself is a hedge against inflation, and the United States inflation is inseparable. Higher oil prices mean that inflation will follow and so will the price of gold.
6, the local interest rate gold profit all depends on its price rise. When interest rates are low, investing in gold can be beneficial; however, when interest rates rise and exceed gold's earnings, charging interest can be more Attractive, gold investment has an opportunity cost, so it is more stable and reliable to charge interest at the bank at this time. Especially when interest rates rise in the US, the dollar will be heavily absorbed and the price of gold is bound to suffer. It's the same reason why the gold price fell when the dollar raised interest rates.
7. it's not hard to understand that when the economy is doing well, most people don't have free money in their hands to go out to some extent By choosing gold to hedge your bets or buying gold jewelry, the price of gold will also be supported. On the other hand, the economy is in recession, people have problems eating, how can there be spare money to invest, the price of gold is bound to fall. But this is unlikely to happen in China, at least for the time being, such as the once-popular Chinese grandmother who went overseas to buy gold, when The price of gold has also been improved.
8, the supply and demand of gold exceeds the demand, and the price of gold falls naturally. This is also a basic law of economic development, although gold has a hedge function, but gold must also have commodity properties, will naturally be subject to The impact of supply and demand.
Tips: how to invest in gold Currently on the market there are banks offering paper gold, gold ETFs, physical gold, spot gold. Futures gold, etc. We'll tell you about a few investment categories that we have more exposure to.
1, paper gold paper gold operating platform in the bank, count virtual gold of a kind, in the bank precious metal financial products are also more popular. . Depending on the circumstances, a transaction fee of 0.25% to 0.3% may be charged, overall its investment threshold is low, more flexible trading. , for those investors who are used to buying and selling short. Its earnings are affected by the price of gold, which rises to make money and falls to lose.
2, physical gold physical gold we are all familiar with, such as gold bars, gold coins, gold bricks, gold jewelry, etc., can be purchased in the bank, but also It's a favorite of Chinese aunts, looks good and keeps its value. Of course, it's just a joke, used to satirize how illiquid physical gold is, and the fact that a chunk of gold in the bank can't be shown off It's pointless to leave it at home for fear that someone might take it away. It's a good idea to get a good deal on your own. So whether it's from liquidity considerations or safety, we don't recommend buying physical gold.
3, gold ETF this should be more familiar to everyone gold fund, but also we recommend a kind of gold investment way. Remember: everyone should be cautious when making decisions about any investment product that uses leverage.
4, spot gold and gold futures mainly refers to London gold and the New York Mercantile Exchange futures gold. Both make use of leverage and require margin payments, and their gains are related to the time of trading, trading rules, and leverage ratio. Again, investment products that involve leveraged operations are necessarily risky and not recommended for consideration.
The most important thing in economics investment goods is liquidity, gold although the current rally is pleasing, but it is, after all, just a hedge against inflation, not with any liquidity function, so we recommend that you do not over-allocate to gold assets and, with costs under control, to gold It would be more appropriate as an icing on the cake investment item. More money should be placed in financial products that have some liquidity and more substantial returns.
