This Investment Will Make Your Portfolio Shine

Recently, the price of gold crossed above $2,000 per oz before retreating back below. It’s the third time it rose above that level in the past three years. Will this time be where buyers carry it to new all-time highs?

Arian Brodsky, director of research at BullionVault says that the yellow metal has further to run, saying, “Surging gold demand worldwide reflects further recognition of the metal’s value as a ‘safe haven,’ especially against the backdrop of a weakening US economy and repeated economic and other countries’ diminished confidence in the US Dollar.”

Brodsky cites recent new data showing China continues to be the largest purchaser for physical gold through the first three months of 2023.

The sentiment has been building that other countries such as China and Russia, would like to remove the U.S. Dollar as the global reserve currency. This would indeed be beneficial to the price of gold.

The relationship between the price of gold and the U.S. dollar is complex and can be influenced by a variety of factors, but generally speaking, the price of gold tends to have an inverse relationship with the U.S. dollar. This means that when the U.S. dollar strengthens, the price of gold usually falls, and when the U.S. dollar weakens, the price of gold usually rises.

This is due to gold being priced in U.S. dollars in the global market, and a stronger dollar can make gold relatively more expensive for buyers in other currencies, leading to a decrease in demand ─ and therefore ─ price. Conversely, a weaker dollar can make gold relatively cheaper for buyers in other currencies, leading to an increase in demand.

Indeed, over the past six months, the dollar index has declined by 10%, while gold has climbed some 15% during that time.

While younger investors, let’s call them millennials, are more likely to buy Bitcoin as a store of value, there have been signs they are warming up to the idea of adding gold to their portfolio.

Many money managers suggest investors allocate a small portion, such as 3%-10%, of their portfolio to gold.

One of the easiest ways to get exposure to gold is through an ETF.

The SPDR Gold ETF (GLD) is one of the largest and most popular ETFs for gold investors. It has nearly $60 billion in assets and an expense ratio of just 0.4% making it a cost efficient means of benefiting from movement in the price of gold.

One of the features investors in GLD like is that unlike other commodity based ETFs, which often use futures contracts to track the underlying price, GLD holds physical bars of gold. This gives investors confidence that their shares of GLD will truly track gold bullion and it is less likely to experience some type of failure due to financial shenanigans.

Just take a look how the ETF has performed over the past month.

You can take your analysis a step further using Magnifi Personal, which allows you to compare gold funds to each other, or compare it against the S&P 500 ETF (SPY) to see how gold holds up against one of the most common investments in the market.

Once you’ve found the stock or fund you’re looking for, you can purchase shares directly with your Magnifi account. Give it a try today!