Even Asset Managers Run For Cover to Gold ETFs

Asset managers that deal heavily in ETFs are taking defensive stances on the current market and buying hard, tangible assets like gold and commodities.

Gold is, and has always has been the most traditional safe haven. As lawmakers are working out a plan to save financial markets, many people want to know where to put their money. One thing is for certain: if inflation rises, food and energy are going to become that much more expensive, reports Trang Ho for Investor’s Business Daily.

Keep in mind that base metals can underperform in a recession, and if Treasury prices drop , there is another place you can place your bets. The bailout package, whatever it consists of, will cause a lot more Treasury debt in the markets. Some analysts think the yield curve will steepen and cause short rates to stay low, and long rates to rise.

Our strategy remains that we will look at those areas of the markets that are moving and are above their trend lines (the 200-day moving average). We do consider other factors, but for a fund to be considered, it must be above this point.

Some funds that give investors exposure to these “safe haven” areas include:

• SPDR Gold Shares (GLD), up 8.6% year-to-date
• iShares COMEX Gold Trust (IAU), up 8.5% year-to-date
• iShares Lehman 20+Year Treasury Bond (TLT), up 7.7% year-to-date
• iShares Lehman 1-3 Year Treasury Bond (SHY), up 4.1% year-to-date

Comments

[bold4gold:]

Gold is THE place to be for at least the next 2 t 3 years. Get it while it is still relatively inexpensive!

2008 Oct 02 08:20 AM

[Philly Jim:]

I'm amazed it's staying under $900 in this environment.

2008 Oct 02 08:49 AM

[bowman711:]

philly jim - read: Gold Bulls: Beware - seekingalpha.com/artic... - to see why gold is not behaving according to the laws of economics

2008 Oct 02 09:15 AM

[bowman711:]

Also: Yesturday (Wed.) there was a gap UP by $6-7 in the COMEX spot gold price right at noon, then it was beaten down by the bullion banks. Anybody have any ideas why it gapped UP intraday?

2008 Oct 02 09:25 AM

[copper1987:]

Gold is going to fall to $600 by the end of this year. I have been buying proshares shorts for the last 6 months. Glad I did!

2008 Oct 02 10:36 AM

[sieraromero:]

Dealers are haveing a very hard time getting silver to sell to customers who want physical possesion. If they get it, it is several dollars above the given spot price. The press should be reporting this, but their masters won't let them! I guess only the rich can get it now at anywhere near the spot price.

2008 Oct 02 10:51 AM