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IBDvalueinvestin (98.52)

GLD or GDX which is better Gold Play?



February 20, 2009 – Comments (3) | RELATED TICKERS: GLD , GDX

Last time GOLD hit $1000 GDX was closer to $50/shr , its trading below where it was at $36 and is undervalued in comparison to GLD.

"This is a secular bull run that will take time to complete," says Smyth.

While many attribute investors' move to gold as a flight to safety, Smyth disagrees. Instead he sees this as a shift on asset allocation.

" It used to be everyone had some gold in their portfolio, but when gold dropped in value, it also got dropped from portfolios," he says. He says advisors are returning to the opinion that all portfolios should have some exposure to gold, also causing the increase in demand.

Adding to the increase is the devaluations of currencies around the globe.

"Foreign investors, like Americans, are nervous about their banking systems and buying gold ETFs in their own currency," Smyth says. "You can even get a redemption in gold."

Banks are joining the game as well. Private banks like Julius Baer have begun creating their own gold ETFs for their clients.

3 Comments – Post Your Own

#1) On February 20, 2009 at 12:48 PM, Gingerbreadman55 (27.38) wrote:

Neither; I want my gold tangible and locked away somewhere. No paper for me.

Look at CEF

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#2) On February 20, 2009 at 12:52 PM, IBDvalueinvestin (98.52) wrote:

GOLD just hit $1000/oz  this is looking more and more like 2001 when GOLD rose from $250 to $750 in a 5yr run.

This time it started at $750 to ?? Report this comment
#3) On March 18, 2009 at 10:06 PM, VALUEDIV (< 20) wrote:

More and more paper money from the FED. Where can it go before the dollar has lost most of its value? Gold and GDX are both great safety nets in your portfolio. Watch the Financial sector for some short technical plays. GLD is the safest in holding 100% gold bullion.

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