Why ASX Gold Is A Many Splendoured Thing To Behold

Investing in gold has been a strategy for diversifying investment portfolios and a hedge against inflation.  With economists forecasting the gold price to trade in a range not far off highs, there are numerous ways to play the gold boom to suit different types of investors.

In recent years, gold hit a record high of US$2,135 per ounce in December 2023. Adjusting for inflation, the peak for gold was in 1980.

Home Grown Aussie Gold

With gold settling in the US$1,900-2,000 per ounce range, the AUD gold price of circa $3,000 is manna from heaven for Australian gold explorers and miners.

ASX gold stocks were mixed with some outperformance in 2023, with concerns among miners about costs.

ASX Gold Miners:

Evolution Mining (ASX: EVN)
SSR Mining (ASX: SSR)
Perseus Mining (ASX: PRU)
Silver Lake Resources (ASX: SLR)
Northern Star Resources (ASX: NST)
Bellevue Gold (ASX: BGL)
Red 5 (ASX: RED)

ASX Gold Explorers:

Kingston Resources (ASX: KSN)
Nexus Minerals (ASX: NXM)
Great Boulder Resources (ASX: GBR)
Strickland Metals (ASX: STK)
Ora Banda Mining (ASX: OBM)
Siren Gold (ASX: SNG)
Horizon Gold (ASX: HRN)
Turaco Gold (ASX: TCG)

Prospects

With lower US real yields and a weaker US dollar forecast by economists, the global price is likely to remain ebullient.

Increasing Western investment demand due to a rising need to hedge portfolios this year, could once again become a dominant and positive driver of gold prices.

If industry cost inflation has subsided, many gold stocks will continue to have their time in the sun.

Gold ETFs

There are different types of gold ETFs, including:

Gold miners ETF

This type of ETF usually owns shares in gold mining companies. If you want to own stocks of various sources of gold miners this could be for you.

You don’t own stock in the companies, since ETFs don’t represent ownership in the underlying assets.

Gold price ETF

Some ETFs track the price of gold bullion. You don’t own the bullion.

If you think the price of gold will increase, this type of gold ETF helps you take advantage.

Leveraged gold ETF

Rather than tracking the underlying assets in the ETF on a 1:1 basis, this type of ETF adds leverage.

How to find a gold ETF

Gold ETFs trade just like stocks on the ASX. Buying gold ETFs takes away the need to hold gold bullion.

However, it’s important to go through the process of making sure that the ETF is right for your portfolio. Gold is a commodity and historically assets in this sector have been volatile.

A gold EFT stock screener and comparison site like JustStocks.com.au can help.

Physical Gold ETFs in Australia include:

VanEck Gold Bullion ETF (ASX: NUGG)

Perth Mint Gold ETF (ASX: PMGOLD)

Global X Physical Gold (ASX: GOLD)

BetaShares Gold Bullion Currency Hedged ETF (ASX: QAU)

Gold ETFs that own shares in gold mining companies include:

Betashares Global Gold Miners ETF (ASX: MNRS)

VanEck Gold Miners ETF (ASX: GDX)

How to buy gold ETFs

You buy a gold ETF in the same way you buy a stock on the ASX.

After electing one, investors can head to their brokerage platform.

Before doing that, here are some tips and resources to determine if they are right for you.

Resources

  1. ETF FAQs.
  2. How To Earn Dividends From ETFs.
  3. Why Younger Investors Have Embraced ETFs.
  4. Golden Rules For Investing In ETFs.
  5. Investing In ETFs – A Simplified Guide.

 

 

 

Disclaimer

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