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Gold ETF's An Apple In The Eyes Of The Investors

Jul. 08, 2013 2:08 AM ET
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Let us reason the contradiction to what Warren Buffett once said: Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

Why would anyone as a matter of fact want to invest in Gold? But according to the reality and objectives of today's typical investors there are two answers to this question: Firstly adding this precious metallic element to ones portfolio serves as a financial gain (profit) from the rapidly increasing prices of it. Secondly this yellow dense metal, hard to corrupt, serves as a hedge (safety) against the social, political and economic crises or currency based crises. Venture Capital Gold has always been an apple of the investor's eye, as it is the safest form of investment due to its market stability. This mineral provides a wide range of feasible opportunities if invested into. You require a cautious and good study of the behavior of its market. A good command of the Venture Capitalist Gold Market can help you gain more on your investment, keeping in mind that the prices depend on the balance of the demand and supply of this "Nobel Metal".

The trend shows that when the value of currency goes down especially of the Dollar, Gold sees an upswing and vise verse an. This is because of the fact that this Nobel metal has never enjoyed good relations with the Dollar, even though it has always been priced in terms of Dollar. Hence keeping a track of such indicators could prove beneficial while investing. A gold assemblage has always coincided with massive investment inflows. Interestingly a high demand in Gold leaves little or no choice for the producers to fund the explorers, who in turn expedite the process of exploring new deposits for extracting it to be able to meet the surge in demand. This makes it a perfect hedging weapon against the Dollar and the investors term this relation as the Venture Capital Gold. So whenever there is an anticipation of a good Gold rally, market professionals tend to exploit the market situation by investing aggressively with the exploration companies through the Gold Explorers Fund.

It is so simple that we can analyze this situation with this example: If there is an increase in the current spot values of this mineral by 25% it would result in a strategic exposure of the Gold Exploring companies. This effect would deliver a 50% or more increase in the same market. Today this form of investment is easily viable through the Gold Explorers ETF. This favored commodity of 2013 has an expectation of an increase in its rise by more than 80% of the gold executives. This figure is a result of an analysis of the one of the largest TSX-listed gold mining companies. It shows that more than 20 of these companies have cash reserves greater than $500 million. Now according to this figure this ETF is proving itself as a good investment. Off lately the Gold prices have stabilized in the recent weeks from a low range in May to a High price in June.

Venture Capital Gold presents a way for investors to involve themselves in the movement of gold prices, both directly and indirectly.

Global X Gold Explorers ETF[GLDX] is accustomed to the yield of the Solactive Global Gold Explorers Index that tracks a list of top holdings like the RAINY RIVER RESOURCES LTD(8.23%), TOREX GOLD RESOURCES INC(7.42&), SEABRIDGE GOLD INC(6.3%) and PRETIUM RESOURCES INC(6.18%) etc. GLDX provides a facility for all those seeking to invest through gold explorers fund at an expense of 0.65% on annual transactions which is an all time low. The fund issuers refer this period as the perfect time for an investment in the Gold Venture Capitalist for a buffer gain.

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