Jul 25, 2011

Posted by in Commodities | 0 Comments

Gold ETF

Trading Gold Etf’s

Gold ETFA gold ETF is an investment that is backed by gold.  ETF stands for exchange traded fund. Investing in this type of fund is not the same thing as investing in actual gold.  The major difference is that when one invests in actual gold, they own the gold and can receive the actual precious metal as a payout.  With a gold ETF, all payouts are in cash, and the investor is only leveraging a fund which tracks the value of an index related to gold.

Because the value of a gold ETF is based on gold, behavior of these investments in the market place is similar to gold–usually a steady increase over a long period of time.  Another advantage to these investments is that the value of gold usually increases as the value of the dollar decreases.  Including these investments in a well-rounded portfolio can help hedge losses when dollar backed investments like stocks are performing poorly.

Investors interested in getting involved with gold investments without actually owning the metal itself should research gold ETFs before plunging into the market place.  Not all of these funds perform equally, and as with any investment, there are winners and losers.  The performance of the investment depends upon which gold index it tracks.

One of the most popular gold ETFs is SPDR Gold Shares ETF, which tracks the price of gold bullion.  Another great gold ETF is iShares COMEX Gold Trust ETF.  This asset was trading as high as one hundred dollars in 2010, and went through a split at that time to lower prices for investors.

Those ready to trade gold ETFs will find ample opportunity online.

1.  www.fidelity.com – Fidelity offers a 90-day free trial and some free ETF trades for new users.

2.  www.scottrade.com – Scott trade is commission free and a great place for casual traders.

3.  www.tdameritrade.com – One of the most respected online trading brokers, they offer over one hundred ETF options for traders.

Beginning investors may find trading with a gold ETF to be easier than trading in stocks.  Researching gold trends and following news that may effect the price of a gold index can be easier than attempting to predict how a single company among thousands will perform in the marketplace.  There are numerous sites providing up-to-date knowledge about gold pricing, so it is easy for traders to keep informed on changes that may impact their investment.

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