Right now is probably not the best time to buy GLD shares. In fact, according to MarketSmith's pattern recognition, you might consider selling the ETF, as it has fallen below its 50-day and 200-day moving averages and below several selling signals. The point here is that gold isn't always a good investment. The best time to invest in almost any asset is when there is negative sentiment and the asset is cheap, providing substantial upward potential when it returns to favor.
The stock price follows the price of gold and is traded like a stock, but the vast majority of investors are not entitled to claim the underlying gold. If we look at both assets more closely, it's clear that gold ETFs and gold bars are very different investments. The second reason has to do with the fact that the weakening of the dollar makes gold cheaper for investors with other currencies. To fully understand how quickly the security of your investment can be called into question, you need look no further than the GLD ETF.
This translates into greater demand from investors who have currencies that have appreciated relative to the U. Even if it holds enough shares, the GLD ETF reserves the right to settle your request for cash delivery. However, the form of gold you buy can make a difference in the return on your investment for you. During those times, investors who held gold could successfully protect their wealth and, in some cases, even use the commodity to escape all the confusion.
If you are an investor who is not planning to accept delivery and are comfortable with a higher degree of risk, GLD may be a good way to expose yourself to the price of gold. If you're looking for an inexpensive way to invest in the direction of the price of gold, GLD is ideal. At the other end of the spectrum are those who claim that gold is an asset with several intrinsic qualities that make it unique and necessary for investors to keep it in their portfolios.