Gold on Steroids
Gold on Steroids By Jeff Remsburg for Nasdaq
Gold is making a move … but for even bigger gains, here’s where to look
NOTE:The stock market and our offices will be closed on Monday in observance of Labor Day. We’ll pick back up with our normal publishing schedule on Tuesday after the Weekend Edition. Enjoy the holiday!
Over the years, gold has developed a reputation as a “safe haven” asset. In other words, when riskier markets (like stocks or fiat currencies) crash, people flock to gold to protect their wealth.
In this way, gold’s main role in a portfolio is as a chaos hedge or wealth preserver. This means investors don’t typically buy gold believing they’re going to see explosive gains like they might in, say, a high-flying tech stock.
But that doesn’t mean explosive gains can’t happen – case in point, the last three months.
One of the most popular ways to invest in gold is the SPDR Gold Shares ETF ( GLD ). It’s designed to track the price of gold. As you can see below, in the past three months, it has surged 20%, dwarfing the S&P’s return of 5%.
But do you know how you could have done even better in gold over the last three months?
Gold miners .
The chart below shows the same S&P and GLD performance as above. But now it includes GDX , which is the VanEck Vectors Gold Miners ETF .
As you can see, it has exploded 46% in three months, crushing both market and gold returns.
We’ve been talking about gold a lot in the Digest this year. It was all the way back in January that we first brought up the “stealth” bull market in gold – well, it isn’t all that stealthy any more.
When we talk about gold here in the Digest , we usually reference it in the general sense, mostly noting gold’s spot price. But there are different ways for investors to play gold, and gold miners can be an especially lucrative way. Think of them as “gold on steroids.”
In today’s Digest , let’s dig just a bit deeper into miners as an investment vehicle you might consider as this gold bull continues gaining steam.