6 Ways to Play Gold — Even Short!
This post is part of a regular series written by ETF Trends editor Tom Lydon, special for CNBC.com.
Inflation fears seem to have replaced panic about whether this country is headed for a repeat of the Great Depression. These new concerns have in turn led to renewed interest in gold.
A number of analysts feel that the precious metal could at least be remaining above $900, if not primed for another surge toward the $1,000 mark. Physical demand is at record levels this year: in the first quarter, demand was up 38% from one year ago.
Whether the metal lives up to these predictions or it fizzles out, there are a number of ways you can play it with exchange traded funds (ETFs):
Buy ETFs That Hold Bullion. By owning funds that hold gold bullion, you can follow along with the spot price of gold without having to deal with finding and paying for storage of the physical metal. Two funds that hold bullion are SPDR Gold Shares and iShares COMEX Gold Trust .
Buy ETFs That Hold Gold Futures. If you’d like to own gold futures instead, without the trouble of rolling them over or just the plain expense of futures investing, PowerShares DB Gold is an option.
Play the People Who Mine the Gold. Instead of investing in the physical metal or futures, you can hold a basket of stocks representing the companies involved in the mining and processing of gold via the Market Vectors Gold Miners .
Hold a Diversified Basket of Precious Metals. As with any asset class, it can be hard to choose which commodity is going to outperform the rest. Why not diversify a little? PowerShares DB Precious Metals holds both gold and silver futures, so you can capitalize on the moves of both metals.
Go Short. If you think gold is going to lose value or you want a short-term hedge in your portfolio, ProShares UltraShort Gold may be an option if you’re aware of the risks. Remember that short and leveraged ETFs rebalance daily and are not intended for buy-and-hold use.
Tom Lydon is the editor of ETF Trends and author of iMoney: Profitable ETF Strategies for Every Investor.