3 Best Gold ETFs for the Next Move Higher

Now is a good time to take a fresh look at the best gold ETFs.

gold stocks to buy
Source: ©iStock.com/f9photos

Just a few months ago, gold was losing its luster and prices hit a multi-year low. Although not quickly or in a straight line, gold prices have climbed higher since then. Is the precious metal ready for a move higher?

Whether you are a short-term trader or a long-term investor, now may be the best opportunity in months or even years to buy shares of gold ETFs. Why? I’m not a technical analyst by profession but even a novice can see that gold prices recently put in a low of $1175 and are now trading around what appears to be a resistance level of $1180.

A move higher may not come quickly but now investors have a relative low-risk buy opportunity with the next resistance looking to be around $1220, with a possible short-term top around $1300.

No matter your perspective, long or short, now is a great time to take look at the best gold ETFs.

Best Gold ETFs for the Next Move Higher: SPDR Gold Shares (GLD)

Energy SPDRExpenses: 0.4%, or $40 for every $10,000 invested

For most investors, the best gold ETF to buy is SPDR Gold Shares (GLD).

GLD is the gold ETF with the largest amount of assets and the highest trading volume, which makes it the most liquid. Together with the low expenses, these qualities make for the best gold ETFs.

The investment objective of GLD is to reflect the performance of the price of gold bullion, less the fund’s expenses. In near unison with gold prices, GLD hit its recent low ($104) at the end of July and tested that low in early August. Today GLD is trading about 9% higher at $113.

If you are betting gold can make another move higher, or if you are looking to diversify your long-term holdings with a touch of gold, GLD is a fine choice.

Best Gold ETFs for the Next Move Higher: iShares Gold Trust (IAU)

ishares ewzExpenses: 0.25%, or $25 for every $10,000 invested

Keeping costs low are crucial for squeezing out every bit of return possible and iShares Gold Trust (IAU) is a case in point.

Although GLD gets all the press, you won’t find much different in design or makeup between that ETF and IAU, but the latter can edge out the former in performance by way of a lower expense ratio.

Although the difference in expenses is only 20 basis points, a performance comparison tells the story. For the year-to-date, IAU is down 0.09% in price, whereas GLD is down 0.26%. Longer-term differences are similar, with IAU consistently edging out GLD by 10 to 20 basis points.

Also, some brokerage firms allow investors to trade iShares with no transaction fees, which adds a performance advantage to consider.

Best Gold ETFs for the Next Move Higher: AdvisorShares Gartman Gold Euro ETF (GEUR)

advisorshares athena high dividend etf diviExpenses: 0.77%, or $77 for every $10,000 invested

For investors concerned about downward pressure on gold prices coming from a strong U.S. dollar, AdvisorShares Gartman Gold Euro ETF (GEUR) is a smart consideration.

Gold investments are made via the U.S. dollar, and the recent support for the precious metal has been due to weakening of the greenback. Therefore, it is likely that most gold ETFs will see more volatility ahead.

However there are gold ETFs, such as GEUR, that are not linked to the dollar. For a bit of recent history, GEUR, which uses the Euro for investing its assets in the gold market, is up 4.4% year-to-date, whereas the average precious metals fund is down 3.5%. This performance beats 99% of category peers and may continue when the U.S. dollar gains in strength.

No matter your choice of gold ETFs, it is wise to use them as diversification tools with allocations of around 5% to 10% of the portfolio.

As of this writing, Kent Thune did not personally hold a position in any of the aforementioned securities, although he holds GLD for some client accounts. His No. 1 holding is his privately held investment advisory firm in Hilton Head Island, SC. Under no circumstances does this information represent a recommendation to buy or sell securities.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2015/10/best-gold-etfs-gld-iau-geur/.

©2022 InvestorPlace Media, LLC