Australia and Canada as a Proxy for Gold (ETFs: EWA, EWC, GLD, IAU)

This article from Bloomberg had a couple of fun facts about Australia and gold, writes Roger Nusbaum. Australia is the third largest supplier of gold (knew that) and the fourth biggest supplier of copper (didn't know that exactly). The article also says that the Aussie dollar has a 0.92 correlation to gold (did not know that, but not shocked). This chart shows what 0.92 looks like:

The Canadian dollar may have a closer correlation than the Aussie.

This has pluses and minuses. I am a big fan of both countries as investment destinations. Too much of them along with a gold stock or two may lead to more exposure to gold than desired.

Long time readers know that I think gold has a place in every portfolio but buying a Canadian bank along with an Aussie retailer [or the Australia ETF EWA and Canada ETF EWC] might give you more correlation to gold than you think.

Just something to think about.

Related:

• ETFs mentioned in this article (clicking on a link pulls up articles for the ETF in question): EWA, EWC.
• Articles about the gold ETFs, GLD and IAU.
• Other articles from The Gold Stock Blog (in beta, though the RSS feed is up and running).

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