Do Gold ETFs Smooth Out Volatility?

While gold has proven to be a far better store of value than any currency over any long-term time horizon, and is thus chosen by many investors as an inflation hedge, its price fluctuations are generally rather volatile in the short run. Under normal circumstances, gold’s perceived trustworthiness over riskier investments attracts a fair amount of speculation. You can almost think of gold as a trusty sponge that is always there to absorb or offset some of the risk taken on by hedge funds and large financial institutions.

Increasingly over the last three or four years, however, gold prices have been unusually stagnant much of the time. According to Bloomberg News, the drop in volatility in precious metal prices may be attributable to the rising popularity of gold exchange-traded funds.

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WGC Launches New Gold ETF (GLDW)

So-called gold exchange-traded funds (ETFs) have risen in popularity among precious metal investors over the past five years or so. These investment vehicles offer the same conveniences as trading stocks while providing exposure to the price of gold.

However, one of the main appeals of ETFs is the diversity they can offer in a single investment product, like a miniature hedge fund. Now, a new “long dollar” gold ETF known as GLDW has been introduced by the World Gold Council (WGC).

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Making Sense of Silver ETFs

Silver prices have been pummeled since the beginning of October, shedding over 15% from their peak this year above $20 per ounce. As a result, the silver exchange-traded funds (ETFs) that track the silver price have also fallen sharply from their highs earlier this autumn.


What does 2017 hold in store for silver ETFs? Moreover, do these funds actually offer any advantages in comparison to directly buying physical silver?

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