SPDR Gold SharesLong
Trading Idea: Buying the SPDR Gold Shares (GLD) ETF
Justification of the investment:
1. The role of gold as a hedge asset
In conditions of economic instability, rising inflation and geopolitical risks, gold is traditionally considered as a "peaceful abode" for investors. In 2024, high volatility in the stock and currency markets is projected to continue, which will increase demand for protective assets such as gold. In addition, central banks continue to buy gold to diversify reserves, which supports its price.
2. Inflation expectations
As inflationary processes continue in the global economy, gold remains a reliable asset to preserve the purchasing power of capital. Inflation reduces the real yields of bonds and other fixed assets, which makes gold more attractive to long-term investors. With rising inflation expectations, especially in the United States and Europe, investment interest in gold is projected to increase.
3. Long-term prospects for value growth
Despite short-term fluctuations, in the long term, analysts see the potential for gold prices to rise to levels of $2,300-2,500 per ounce by 2025. This is due to both increased demand from investors and central banks, as well as limited supply — gold production remains stable, and the discovery of new large deposits is becoming increasingly rare.
4. Reduction of real interest rates
Low real interest rates (taking into account inflation) or their reduction make gold a more attractive asset for investors. Since gold does not generate fixed income, its attractiveness increases during periods when the real yield on bonds and deposits falls.
Instrument Selection:
The SPDR Gold Shares (GLD) ETF is one of the largest and most liquid instruments tracking the price of physical gold. It allows investors to get exposure to the price of gold without the need for physical storage of the metal.
- The volume of assets under management: more than $50 billion.
- Low management fee: 0.40% — GLD has a competitive commission compared to other gold ETFs.
- Transparency and liquidity: Due to its volume and popularity among institutional and retail investors, GLD has high liquidity, which minimizes spreads and makes this fund available for trading at minimal cost.
Possible risks:
- Gold price fluctuations: Gold can be subject to significant price fluctuations, especially when central bank rates change or the US dollar fluctuates sharply.
- Dependence on monetary policy: gold has historically demonstrated an inverse correlation with the US dollar. A stronger dollar or higher interest rates could weaken demand for gold.
- Lack of yield: Unlike bonds or stocks, gold does not generate dividends or interest income. This makes it less attractive during periods of low inflation or high interest rates.
Conclusion:
Buying the SPDR Gold Shares (GLD) ETF is the best way to gain access to gold in conditions of inflationary risks and economic uncertainty. The expected increase in the value of gold and low real interest rates create favorable conditions for investors seeking to diversify their portfolios and protect capital from inflationary influences.
1. The role of gold as a hedge asset
In conditions of economic instability, rising inflation and geopolitical risks, gold is traditionally considered as a "peaceful abode" for investors. In 2024, high volatility in the stock and currency markets is projected to continue, which will increase demand for protective assets such as gold. In addition, central banks continue to buy gold to diversify reserves, which supports its price.
2. Inflation expectations
As inflationary processes continue in the global economy, gold remains a reliable asset to preserve the purchasing power of capital. Inflation reduces the real yields of bonds and other fixed assets, which makes gold more attractive to long-term investors. With rising inflation expectations, especially in the United States and Europe, investment interest in gold is projected to increase.
3. Long-term prospects for value growth
Despite short-term fluctuations, in the long term, analysts see the potential for gold prices to rise to levels of $2,300-2,500 per ounce by 2025. This is due to both increased demand from investors and central banks, as well as limited supply — gold production remains stable, and the discovery of new large deposits is becoming increasingly rare.
4. Reduction of real interest rates
Low real interest rates (taking into account inflation) or their reduction make gold a more attractive asset for investors. Since gold does not generate fixed income, its attractiveness increases during periods when the real yield on bonds and deposits falls.
Instrument Selection:
The SPDR Gold Shares (GLD) ETF is one of the largest and most liquid instruments tracking the price of physical gold. It allows investors to get exposure to the price of gold without the need for physical storage of the metal.
- The volume of assets under management: more than $50 billion.
- Low management fee: 0.40% — GLD has a competitive commission compared to other gold ETFs.
- Transparency and liquidity: Due to its volume and popularity among institutional and retail investors, GLD has high liquidity, which minimizes spreads and makes this fund available for trading at minimal cost.
Possible risks:
- Gold price fluctuations: Gold can be subject to significant price fluctuations, especially when central bank rates change or the US dollar fluctuates sharply.
- Dependence on monetary policy: gold has historically demonstrated an inverse correlation with the US dollar. A stronger dollar or higher interest rates could weaken demand for gold.
- Lack of yield: Unlike bonds or stocks, gold does not generate dividends or interest income. This makes it less attractive during periods of low inflation or high interest rates.
Conclusion:
Buying the SPDR Gold Shares (GLD) ETF is the best way to gain access to gold in conditions of inflationary risks and economic uncertainty. The expected increase in the value of gold and low real interest rates create favorable conditions for investors seeking to diversify their portfolios and protect capital from inflationary influences.
CEO Mind-Money.eu
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Personal website of Julia Khandoshko:
👉 iuliia-khandoshko.com/
👉 mind-money.eu
Personal website of Julia Khandoshko:
👉 iuliia-khandoshko.com/
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