Month: April 2021

The beginning of spring marks a traditional time to tackle ambitious projects like cleaning out the attic or organizing the junk drawer.

However, as this new spring begins, I’ve been thinking. Why stop at just projects around the house? Spring cleaning can go beyond just your living space why not apply the same ethos to your finances? We live in a constantly changing world, and our portfolios should be built to survive and thrive in it.

 

Look at the financial landscape.

Certain key factors hang over the economic landscape and shape the direction it will head in. The most notable factor could be the towering size of the U.S. federal debt. The new stimulus bill has added $1.9 trillion to an already $28 trillion–sized debt pile, and more debt could be on the way in the form of an infrastructure package. This enormous debt could weaken confidence in the dollar internationally and raises the possibility of a higher tax burden. There is also rising inflation, which has worried some experts—and the Fed’s policies toward buying securities and low interest rates don’t seem to be changing soon.

The stock market has benefited from these policies in the past year, but it has many worried that the market could be on the verge of a huge bubble. The corporate world also has its own debt problem: Bloomberg reported in March that corporate debt has recently hit an all-time high, and much of this debt is in companies considered “speculative” grade.

There are also notable opportunities to take advantage of. As the world ramps up reopening, manufacturing is set for a rebound. Additionally, analysts at Bank of America have recently said they believe most “real assets” – such as commodities and property – are underpriced and are worth buying. Michael Hartnett, the bank’s chief investment strategist said “Real assets are a hedge for War against Inequality, inflation & infrastructure spending,” in a note.

With all of these factors in play, what should you think about when building your portfolio?

 

Make an asset checklist.

When considering new assets to keep in this world, use some of the following criteria. What assets have growth potential? Which assets are historical hedges against federal debt and inflation? Which assets could diversify against the problems in both the stock market and the value of the dollar?

 

Precious metals fit these criteria.

Gold and other precious metals could be perfect assets to own in the current world situation. Gold has traditionally been seen as a hedge against inflation and federal debt. Precious metals like gold, silver, and especially platinum and palladium are poised to rise with manufacturing’s return. They are also separate from the potential stock bubble.

These are some of the reasons Mark Mobius, executive chairman of Templeton Emerging Markets Group, told interviewers at CNBC that he believes a portfolio should hold at least 10 percent in precious metals, specifically gold, silver, platinum, and palladium. Will you take his advice?

The post Adjusting to The Year Ahead appeared first on U.S. Money Reserve.

A gold ETF (exchange-traded fund) is a commodity ETF that consists of only one principal asset: gold. But if you have a gold ETF, do you really own any gold? In this crash course on gold ETFs, you’ll learn what gold ETFs are, how they’re bought and sold, and how their role can differ from the role of physical gold in your portfolio.

How do gold ETFs work?

Gold ETFs trade on stock exchanges, just like shares of stock and mutual funds do. Owning shares in a gold ETF enables someone to gain partial exposure to the performance of the spot price of gold.

However, a gold ETF does not mean you directly own physical gold. The ETF represents a paper claim on the commodity and not the actual commodity itself. In reality, the ETF company actually holds the physical gold. As Investopedia notes, an ETF is typically set up as a trust and within the trust is gold bars. There is a specific number of gold bars allocated to each share of the ETF issued. So when you buy a gold ETF, you’re buying a portion of the gold that’s held by the trust.

Make sure you read the gold ETF prospectus or description, though. Some ETFs hold gold, “while others follow a gold index or a group of companies involved in gold acquisition or mining operations,” Retirement Living explains.

The first gold ETF in the U.S. debuted in 2004.

What affects the price of gold ETF shares?

Several factors could affect the price of gold ETF shares. Among them:

• A market sell-off of physical gold during a crisis could bring down the price of ETF shares.
• A substantial sell-off of physical gold by central banks and other major holders of the yellow metal could impact the price of ETF shares.
• A big sell-off of one company’s gold ETF shares could negatively impact other gold ETFs.
• Fluctuations in gold supply and demand, interest rates, currency exchange rates, and inflation rates could influence the price of gold and, therefore, the price of a gold ETF share.

How does a gold ETF and physical gold compare?

There are three important differences to consider when comparing a gold ETF and physical gold.

• With a gold ETF, you own an asset on paper. With physical gold, you own an entirely tangible asset that you can hold in your hand and lock away in a safe.
• Gold ETFs and the gold associated with them cannot be sold outside a formal financial structure, while physical gold can.
• A gold ETF may charge management fees and may carry additional long-term tax implications.

For advanced market watchers, here’s another matter to consider regarding gold ETFs.

When massive amounts of gold ETFs are bought on the open market, this can put upward pressure on the price. When large quantities are sold, this can cause a decrease in gold’s price. This effect becomes more pronounced the more volatile a market becomes.

Under ordinary circumstances with mid-volume trading, ETFs typically have a limited effect on gold prices. In higher-volatility circumstances, though, it’s possible for ETF buying and selling to have a noticeable impact on gold prices.

For example, in early 2020, people “cashed out of gold positions” to make up for losses elsewhere. While this put some downward pressure on the price of gold, gold was still able to perform its strategic function as a liquid asset to “meet margin calls…amid sharp declines across equity markets,” Kitco notes.

Should you consider buying gold ETFs or physical gold?

So should you buy shares in a gold ETF or buy physical gold? Well, that choice is up to you.

However, it’s worth noting that gold ETFs typically don’t offer as much portfolio diversification as physical gold does. Gold stocks “do not provide the same downside capture or diversification as physical gold itself,” according to U.S. News & World Report.

Perhaps the biggest difference between gold ETFs and physical gold is that you “never have any actual gold in your possession,” Retirement Living adds. Sure, you “own physical gold through the type of gold ETF that purchases it directly, but you can’t go knocking on someone’s door to claim it.”

Ready to learn more about physical gold? Call U.S. Money Reserve with more questions about precious metals. We can help you choose the right amount and type of physical gold that fits your needs.

The post What Is a Gold ETF & Is It a Good Time to Buy? appeared first on U.S. Money Reserve.

Kitco News

(Kitco News) – After the worst start to the year in almost four decades and the worst quarterly performance in more than four years, gold is kicking off the second quarter on a much better note. But will it last?

The post Worst quarter in over 4 years: Can gold price turn it around? appeared first on WorldSilverNews.

Kitco News

(Kitco News) – Ok Tedi Mining announced Wednesday that its mine operations will resume on Thursday 1st April 2021, after operations were suspended temporarily on 19th March 2021 following a surge in COVID-19 cases detected at the mine site.

The post Ok Tedi mine resumes operations after COVID-19 related suspension appeared first on WorldSilverNews.

Kitco News

(Kitco News) – Argonaut Gold (TSX: AR) reported Thursday that the previously announced definitive agreement to sell its Ana Paula project, located in Mexico, expired on March 31, 2021.

The post Sale of Argonaut Gold’s Ana Paula project collapsed appeared first on WorldSilverNews.

Kitco News

(Kitco News) – MAG Silver (TSX / NYSE American: MAG) announced today that between August and December 2020, 71,859 tonnes of mineralized material from Juanicipio mine in Mexico with a head grade of 328 grams per tonne were processed through the Fresnillo plant, with 616,341 payable silver ounces, 1,029 payable gold ounces, 163 tonnes of lead and 224 tonnes of zinc produced and sold.

The post MAG Silver and Fresnillo generate $11M ‘pre-production’ gross profit at Juanicipio appeared first on WorldSilverNews.

Kitco News

(Kitco News) – Bullish sentiment in the gold market among Wall Street analysts is improving heading into the long week as the price managed to bounce off a double bottom below $1,700 an ounce. However, the market still has some major hurdles to clear, and retail investors remain skeptical that current price action can be sustained.

The post $1,750 gold price is still key even as short-term sentiment improves appeared first on WorldSilverNews.

GR Silver Mining closes on its acquisition of Marlin Gold Mining from Mako Mining  Proactive Investors USA

GR Silver Completes Acquisition of 100% of Marlin Gold, Including its Past-Producing La Trinidad Mine and Extensive Concession Portfolio in the Rosario Mining District  Canada NewsWire