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In this episode of ETF Spotlight, I speak with Imaru Casanova, Portfolio Manager for Gold and Precious Metals at VanEck, about the record-setting rally in gold and miners.
The price of gold has recently surged to an all-time high, surpassing $2,500 per troy ounce. Optimism around interest rate cuts and record purchases by central banks continue to boost gold.
Rising geopolitical tensions have also supported gold, which is seen as a safe haven in times of volatility and geopolitical stress. The precious metal is now up 22% year-to-date and has outperformed the S&P 500 ETF (SPY - Free Report) , which is up 19%.
Gold purchases by central banks have soared in recent years, particularly following Russia's invasion of Ukraine. Central banks made net purchases of 1,037 tons last year, according to the World Gold Council, and continue to accumulate gold this year.
Rapidly rising debt and fiscal deterioration in the U.S. are among the reasons why central banks are diversifying away from the U.S. dollar.
In general, gold has historically performed better during periods of monetary easing. Lower interest rates reduce the opportunity cost of owning gold, thereby boosting its appeal, as the precious metal does not yield any income.
I believe gold deserves a small allocation in a portfolio mainly due to its diversification benefits. According to a Financial Times analysis, over the past 20 years or so, gold has provided better diversification benefits than bonds for an equity portfolio.
Gold equities, which had lagged behind the performance of the metal earlier this year, have been rising lately. Miners are generally high-beta plays on the price of gold.
The VanEck International Investors Gold Fund (INIVX - Free Report) , which started back in 1968, is co-managed by Imaru. The VanEck Gold Miners ETF (GDX - Free Report) is the largest gold mining ETF.
The SPDR Gold Trust (GLD - Free Report) is the largest and most liquid gold ETF, with about $69 billion in AUM. For long-term focused investors, the SPDR Gold MiniShares Trust (GLDM) and the iShares Gold Trust Micro (IAUM) are more suitable due to their ultra-low expense ratios.
Tune in to the podcast to learn more.
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Why Gold Prices Are Set to Soar
In this episode of ETF Spotlight, I speak with Imaru Casanova, Portfolio Manager for Gold and Precious Metals at VanEck, about the record-setting rally in gold and miners.
The price of gold has recently surged to an all-time high, surpassing $2,500 per troy ounce. Optimism around interest rate cuts and record purchases by central banks continue to boost gold.
Rising geopolitical tensions have also supported gold, which is seen as a safe haven in times of volatility and geopolitical stress. The precious metal is now up 22% year-to-date and has outperformed the S&P 500 ETF (SPY - Free Report) , which is up 19%.
Gold purchases by central banks have soared in recent years, particularly following Russia's invasion of Ukraine. Central banks made net purchases of 1,037 tons last year, according to the World Gold Council, and continue to accumulate gold this year.
Rapidly rising debt and fiscal deterioration in the U.S. are among the reasons why central banks are diversifying away from the U.S. dollar.
In general, gold has historically performed better during periods of monetary easing. Lower interest rates reduce the opportunity cost of owning gold, thereby boosting its appeal, as the precious metal does not yield any income.
I believe gold deserves a small allocation in a portfolio mainly due to its diversification benefits. According to a Financial Times analysis, over the past 20 years or so, gold has provided better diversification benefits than bonds for an equity portfolio.
Gold equities, which had lagged behind the performance of the metal earlier this year, have been rising lately. Miners are generally high-beta plays on the price of gold.
The VanEck International Investors Gold Fund (INIVX - Free Report) , which started back in 1968, is co-managed by Imaru. The VanEck Gold Miners ETF (GDX - Free Report) is the largest gold mining ETF.
The SPDR Gold Trust (GLD - Free Report) is the largest and most liquid gold ETF, with about $69 billion in AUM. For long-term focused investors, the SPDR Gold MiniShares Trust (GLDM) and the iShares Gold Trust Micro (IAUM) are more suitable due to their ultra-low expense ratios.
Tune in to the podcast to learn more.