It feels like 2008 all over again. Fear about continued market
volatility coupled with a wave of bullish sentiment for gold has
pushed prices for the yellow metal and its largest
physically-backed exchange traded fund (
) to record highs.
Despite Europe's $1 trillion bailout move, market stress is
running high. What does that mean? You know it - many investors
have flocked back into gold, sending prices to all-time highs. Gold
closed at a record yesterday, and this morning it's continuing the
climb, trading close to $1,250 an ounce.
- The truth is that investors are now troubled over possible
defaults by eurozone nations. The huge infusion of money into the
economy has raised questions about whether it's left the eurozone
more exposed to risks.
- Adding to this trepidation is the fact that the recession
recovery on our own soil is going to be a long and drawn-out
explains Allen Syorka for
The Wall Street Journal
Why Gold is Great as a Haven and a Hedge.
- The cash floating around the world has also given rise to
inflation concerns. Gold is viewed as a hedge against inflation,
so investors are staking their claims now for future protection.
How Gold Got Back Into the Groove.
- And lastly, part of the rally can be viewed as a bit of a
self-fulfilling prophecy. Prices are rising, luring more
investors to take part, which is driving prices higher. Analysts
now say gold's next upside is $1,278. Are they right? Time will
If you want to invest in gold, first be aware of your options.
Funds such as those from
are all physically-backed. The
gold fund holds futures, so it won't move right in line with spot
gold miner ETFs hold stocks of gold miners and are the least
susceptible to daily price shifts. [
4 Commodity ETF Types.
Second, have a strategy in place. With bull runs like this, it's
always wise to know what your sell strategy is before you get in.
We use a trend following strategy, which you can read about here. [
How to Follow Trends.
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