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Gold has had a solid start this year, with prices hitting the highest levels since mid-June. The recessionary fears, easing inflation, pull-back in the U.S. dollar, the Fed minutes and geopolitical risks are driving the metal higher, with analysts expecting further gains this year.
As such, investors should tap the strength with the popular ETFs in the space. SPDR Gold Trust ETF (GLD - Free Report) , iShares Gold Trust (IAU - Free Report) , SPDR Gold MiniShares Trust (GLDM - Free Report) , Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL - Free Report) , and iShares Gold Trust Micro (IAUM - Free Report) . These funds have a Zacks ETF Rank #3 (Hold).
The Fed minutes revealed that the central bank will continue increasing the rates to control inflation but in a gradual way intended to limit the risks to economic growth. This has offered some relief to bullion as the dollar weakens on the prospect of smaller interest rate hikes after a stellar run in 2022 (read: Gold ETFs Shining on Bullion's Biggest Monthly Gain in 2 Years).
Additionally, inflation in the United States has cooled down gradually, underscoring that the worst has likely passed. The consumer price index jumped 7.1% year over year in November, down from a 7.7% year-over-year increase in October and a peak of 9.1% in June. This represents the lowest annual increase since late 2021.
Further, widespread COVID-19 cases in China have added to the gloom over a long-term slump in its property sector that has raised the demand for gold as a safe haven. This is because gold is often used as a means of preserving wealth during times of financial and political uncertainty. It usually does well when other asset classes struggle. Bullion prices were also boosted by increased safe-haven demand as the International Monetary Fund warned of a potential recession in 2023. A third of the global economy will be in recession this year, per the agency.
Here’s a detailed discussion of the five ETFs mentioned earlier:
SPDR Gold Trust ETF tracks the price of gold bullion measured in U.S. dollars and is kept in London under the custody of HSBC Bank USA. It is an ultra-popular gold ETF with AUM of $53.4 billion and a heavy volume of about 5 million shares a day (read: ETFs to Benefit as Inflation Drops to One-Year Low).
SPDR Gold Trust ETF charges 40 bps in fees per year from investors.
iShares Gold Trust offers exposure to the day-to-day movement of the price of gold bullion. It is backed by physical gold under the custody of JP Morgan Chase Bank in London.
iShares Gold Trust charges 25 bps in annual fees. It is liquid and popular, trading in average daily volumes of 4.5 million shares and has AUM of $26.1 billion.
SPDR Gold MiniShares Trust seeks to reflect the performance of the price of gold bullion. It is a slightly modified alternative to the State Street behemoth gold fund SPDR Gold Trust ETF.
SPDR Gold MiniShares Trust is the low-cost choice in the U.S. listed physically gold-backed ETF space, charging investors 10 bps in annual fees. It has $5.2 billion in AUM and trades in a solid average daily volume of 1.6 million shares.
Aberdeen Standard Physical Swiss Gold Shares ETF tracks the price of gold bullion. The Trust holds allocated physical gold bullion bars stored in secure vaults in Zurich, Switzerland and London, the United Kingdom (read: Can Gold ETFs Rebound Ahead?).
Aberdeen Standard Physical Swiss Gold Shares ETF has amassed $2.4 billion in its asset base and trades in a solid volume of 1.7 million shares per day. It charges 17 bps in annual fees per year.
iShares Gold Trust Micro offers exposure to the day-to-day movement of the price of gold bullion. It is the lowest-cost gold ETF on the market, having an expense ratio of 0.09%. iShares Gold Trust Micro has amassed $1.1 billion in its asset base while trading in an average daily volume of 341,000 shares.
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Gold Set to Shine in 2023: Bet on These ETFs
Gold has had a solid start this year, with prices hitting the highest levels since mid-June. The recessionary fears, easing inflation, pull-back in the U.S. dollar, the Fed minutes and geopolitical risks are driving the metal higher, with analysts expecting further gains this year.
As such, investors should tap the strength with the popular ETFs in the space. SPDR Gold Trust ETF (GLD - Free Report) , iShares Gold Trust (IAU - Free Report) , SPDR Gold MiniShares Trust (GLDM - Free Report) , Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL - Free Report) , and iShares Gold Trust Micro (IAUM - Free Report) . These funds have a Zacks ETF Rank #3 (Hold).
The Fed minutes revealed that the central bank will continue increasing the rates to control inflation but in a gradual way intended to limit the risks to economic growth. This has offered some relief to bullion as the dollar weakens on the prospect of smaller interest rate hikes after a stellar run in 2022 (read: Gold ETFs Shining on Bullion's Biggest Monthly Gain in 2 Years).
Additionally, inflation in the United States has cooled down gradually, underscoring that the worst has likely passed. The consumer price index jumped 7.1% year over year in November, down from a 7.7% year-over-year increase in October and a peak of 9.1% in June. This represents the lowest annual increase since late 2021.
Further, widespread COVID-19 cases in China have added to the gloom over a long-term slump in its property sector that has raised the demand for gold as a safe haven. This is because gold is often used as a means of preserving wealth during times of financial and political uncertainty. It usually does well when other asset classes struggle. Bullion prices were also boosted by increased safe-haven demand as the International Monetary Fund warned of a potential recession in 2023. A third of the global economy will be in recession this year, per the agency.
Here’s a detailed discussion of the five ETFs mentioned earlier:
SPDR Gold Trust ETF (GLD - Free Report)
SPDR Gold Trust ETF tracks the price of gold bullion measured in U.S. dollars and is kept in London under the custody of HSBC Bank USA. It is an ultra-popular gold ETF with AUM of $53.4 billion and a heavy volume of about 5 million shares a day (read: ETFs to Benefit as Inflation Drops to One-Year Low).
SPDR Gold Trust ETF charges 40 bps in fees per year from investors.
iShares Gold Trust (IAU - Free Report)
iShares Gold Trust offers exposure to the day-to-day movement of the price of gold bullion. It is backed by physical gold under the custody of JP Morgan Chase Bank in London.
iShares Gold Trust charges 25 bps in annual fees. It is liquid and popular, trading in average daily volumes of 4.5 million shares and has AUM of $26.1 billion.
SPDR Gold MiniShares Trust (GLDM - Free Report)
SPDR Gold MiniShares Trust seeks to reflect the performance of the price of gold bullion. It is a slightly modified alternative to the State Street behemoth gold fund SPDR Gold Trust ETF.
SPDR Gold MiniShares Trust is the low-cost choice in the U.S. listed physically gold-backed ETF space, charging investors 10 bps in annual fees. It has $5.2 billion in AUM and trades in a solid average daily volume of 1.6 million shares.
Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL - Free Report)
Aberdeen Standard Physical Swiss Gold Shares ETF tracks the price of gold bullion. The Trust holds allocated physical gold bullion bars stored in secure vaults in Zurich, Switzerland and London, the United Kingdom (read: Can Gold ETFs Rebound Ahead?).
Aberdeen Standard Physical Swiss Gold Shares ETF has amassed $2.4 billion in its asset base and trades in a solid volume of 1.7 million shares per day. It charges 17 bps in annual fees per year.
iShares Gold Trust Micro (IAUM - Free Report)
iShares Gold Trust Micro offers exposure to the day-to-day movement of the price of gold bullion. It is the lowest-cost gold ETF on the market, having an expense ratio of 0.09%. iShares Gold Trust Micro has amassed $1.1 billion in its asset base while trading in an average daily volume of 341,000 shares.