Gold Miner ETFs Glitter as Geopolitical Tensions Mount

Gold Miner ETFs Glitter as Geopolitical Tensions Mount

From investopedia.com

Despite geopolitical tensions popping up everywhere investors look, gold prices have failed to capitalize on the yellow metal's safe-haven status amid sustained U.S. dollar strength – typically, the two assets have an inverse relationship, which has put downward pressure on the "risk-off" commodity since late February. That changed Friday when U.S. President Donald Trump threatened Mexico with a 5% tariff on all imports to curb illegal immigration. The move raised global uncertainty to levels not seen since the fourth quarter of 2018, especially when compounded with renewed U.S.-China trade tensions, Brexit ... (full story)

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Jun 3, 2019 10:07pm

Quoting bigtx

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I don't understand enough to know how to invest in gold miners specifically. I know some people trade oil explorers as a proxy for oil. People must do the same for gold. There seems to be a lot of interest in the production aspect. I better do some studyin

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Investing in miners generally works well as a proxy for metals. Their margins will go up or down depending on commodities prices. Higher margin = higher EPS, etc. Additionally, miners hold metals inventories on their balance sheet so the value of their company is directly impacted by metals prices.

If everything goes according to plan, owning miners is good a way to enhance your return. Its a lot like owning a high beta tech stock versus just buying the S&P 500. You might win big, but its a more complicated bet and more things can go wrong.

bigtx

Jun 3, 2019 9:16pm

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I don't understand enough to know how to invest in gold miners specifically. I know some people trade oil explorers as a proxy for oil. People must do the same for gold. There seems to be a lot of interest in the production aspect. I better do some studyin

Jun 3, 2019 9:21pm

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Jun 4, 2019 2:23pm

Thanks for your help EF! I would say you did my studying for me but now you peaked my interest. Study I will!

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Jun 3, 2019 6:28pm
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