Gold Etfs-this Is Your Chance To Get Rich With Them!

Gold prices breached the historical barrier of $1

,200 per ounce in December last year. They are hovering around something like $1,000 per ounce. But experts are of the opinion that the long term trend in the gold market points towards a price of $2,000, $3,000 or even $5,000 per ounce in the coming months and years.

This long term trend in the gold market is being fueled by the geopolitical uncertainity, weakness in the US Dollar, supply constraints, growing demand for gold by investors and hedgers and a host of other factors! What this means is that gold market is in a long term bull market due to multiple factors.

The last bull market in gold had lasted for decade. It has started around 1970 and ended in 1980. It was fueled by the demise of the Bretton Woods System. When this system was in its last throes, investors flocked towards gold. This started the trend in the market that lasted for around ten years when gold prices reached around $825 per ounce. Now, in terms of todays money, this should be like $2,000 per ounce. Right now gold prices are around $1,000 per ounce. So, you can see there is still a lot of space left for the gold market to cover.

But how to invest in gold? Some five to ten years back, it was difficult to invest directly in gold. Either you had to buy gold bullions or trade gold futures. But this changed altogether with the introduction of Exchange Traded Funds (ETFs).

ETFs trade like stocks but give you the advantages of a mutual fund while having none of its disadvantages. You can buy or sell shares of these ETFs like ordinary stocks. You can trade these ETFs on almost all the major exchanges like the New York Stock Exchange, the London Stock Exchange, The Frankfurt Stock Exchange, The Tokyo Stock Exchange and a host of others. So investing and trading them is not much of a big deal now!

There is a subtle difference in different Gold ETFs that you should know. Some invest directly in gold bullions and physically possess this precious metals. These ETFs tend to follow spot gold prices very accurately. On the other hand, some Gold ETFs, invest in gold futures. Now, futures prices do follow the spot prices of the commodity that they are based on but sometimes they get deviated due to the backwardation and contango in the futures market. Something technical? Don't worry! I only meant to point out that when you invest in these vehicles just do your research and figure out what vehicle is best suited for your investment needs!

You can also invest in gold mutual funds. But investing in ETFs is much better than investing in mutual funds. The commission charged is less, the annual fee charged is less. You can only buy or sell the shares of a mutual fund at the end of the day when the trading has closed. In case of ETFs, you can buy and sell the shares anytime you want.

by: Ahmad Hassam

POST COMMENT

Coin collection - Collect US three-cent silvers Use of Colloidal Silver in Treatment of Skin Rash Golden Dragon Dance Mother's Day Jewelry Gifts- Mothers Day Gift Ideas A Complete Guide Buying Wholesale Diamonds Do you get caught because of buying wow gold while playing world of warcraft? How to Get WoW Gold Without Getting in Trouble World of Warcraft? Wear Israeli Jewelry To Bring Good Luck In Your Life Diamonds for Engagement Less Is More! Behind The Rush For Sterling Silver Jewelry Jewellery For All Apple iPod shuffle 2 GB Silver (4th Generation) NEWEST MODEL Review A Gold Nose Ring As It Was Meant To Be Worn