Liquid Alternatives: Investors Flock To Gold In Risk-Off Move; Goldman Predicts $1,800

March 2, 2020 | Liquid Alternatives
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Gold has earned a year-to-date return of 3.83%.

Goldman Sachs (NYSE: GS) thinks gold could touch $1,800/oz in the near future given the confluence of macroeconomic factors that currently erodes risk-on investments. Meanwhile, investors have lapped up the shiny metal, and its ETFs, in a move smacking of global risk aversion.

“In the event that the virus effect spreads to Q2, we could see gold top $1,800/oz already on a 3-month basis,” says the investment bank. (Yahoo Finance)

Virus fears drive up gold and its ETFs

The world’s largest gold-backed ETF, SPDR Gold Trust ETF (NYSE: GLD), touched a 52-week high of $158.53 last week, its price fueled by the global panic surrounding the coronavirus epidemic. Investors rushed to the sanctuary of gold, while Goldman cited the US elections and low real rates as the reason for its bullish $1,800 prognosis.

In addition, there is increasing global consensus regarding probable rate cuts by central banks to counter the recessionary impact of the virus. With the Fed expected to implement at least two rate cuts of 25 bps each, the dollar may weaken, and therefore push gold prices up.

ETFs for a punt on the shiny metal

It, therefore, makes sense to diversify one’s holdings and take an exposure to the yellow metal. The best way to do this is to invest in a gold-backed ETF. Here are 5 ETFS you could consider:

Symbol ETF Name Total Assets ($MM) YTD Gain Avg Volume Expense Ratio
GLD SPDR Gold Trust $48,339.72 3.83% 9209954 0.40%
IAU iShares Gold Trust $19,551.83 3.93% 19742880 0.25%
SGOL Aberdeen Standard Physical Gold Shares ETF $1,462.77 3.83% 787484 0.17%
GLDM SPDR Gold MiniShares Trust $1,402.80 3.96% 1595884 0.18%
BAR GraniteShares Gold Trust $705.89 4.04% 212840 0.17%

 

Related Story:   Hedge Fund Titan Ray Dalio Recommends Investing in Gold

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