The Good and Bad of Gold and Silver ETFs

   

Video Transcript

You can see silver prices have been coming down, and when I pull up a new chart in the video of the SPDR Gold Shares ETF (NYSE:GLD), you can see that gold prices have been in a steady decline, as well. So, precious metals have fallen out of favor as the global economy really hasn’t picked up enough to put any inflationary pressure on any of the central banks and their easing monetary policies, so there’s been nothing to hedge against right now. Nobody’s anticipating that we’re going to get runaway inflation any time soon and that was one of the things that was driving the value of some of these precious metals.

Plus, we have seen investors rotating out of these ETFs like GLD. The fact that these precious metals are now available in these ETFs, whether it’s GLD or the iShares Silver Trust (NYSE:SLV), has meant that individual investors have much easier access to commodities in our accounts without having to go out and open an individual futures account. That used to be the case. If you wanted to trade commodities, you had to have a futures account.

Well, now, we don’t, so it makes it much easier for people to pile into commodities, but it also makes it much easier for people to shed those commodities from their portfolios. We’ve been seeing that recently, especially with GLD which has had a heavier outflow of funds, which has contributed to pushing the price down.

Investor Place advisors John Jagerson and S. Wade Hansen are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news.  Get in on the next trade and get 1 free month today by clicking here.


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