How to Profit From Gold ETF Investing

There’s no way around it. Gold has been one of the best places to be invested for the past two years. But even as it hits all-time high after all-time high, it’s got a lot more room to run. Simple analysis says it could easily hit $8,000 or more in just a few short years. But if you’re hesitant to invest in individual stocks, how can you take part in the rest of the rally? Well, you can still turn an easy profit thanks to gold ETF investing.

So today let’s take some time to cover a few of the many options you’ve got when it comes to gold ETF investing…

So today let’s take some time to cover a few of the many options you’ve got when it comes to gold ETF investing…

Gold ETF Investing: The Metal

First things first, when you search for gold ETF investing, you’re going to get a whole lot of options for funds that give you exposure to the precious metal itself. Some of these give that exposure by owning physical gold and storing it in a vault. Some give exposure by owning futures contracts and rolling them forward as they get closer to expiration. Others still use completely different financial instruments to give you exposure to the price fluctuations of gold.

But when it comes to size, there’s one gold ETF that stands head and shoulders above the rest. And that’s the SPDR Gold Shares ETF (NYSE: GLD). It’s one of the funds where the exposure to gold is provided through actual gold bullion locked in vaults. It’s easy to buy and easy to sell because a lot of people buy and sell it every day. And as gold runs up, it does too. So far in 2024, this fund is up around 24%.

It’s not the only fund for gold ETF investing, though. In fact, it’s far from it…

Just a cursory search yields another 17 funds for investors to choose from. And one of those is the ProShares Ultra Gold ETF (NYSE: UGL). It’s designed to deliver two times the daily performance of gold prices. And it accomplishes that through exposure to gold futures. It’s up over 40% this year thanks to its leverage driving outperformance. But it’s not guaranteed to move in lockstep with gold prices. And that leverage cuts both ways. So this is a fund that’s best left to more experienced gold ETF investors.

Another, perhaps more interesting fund for some folks interested in gold ETF investing is the Franklin Responsibly Sourced Gold ETF (NYSE: FGDL). This one is also backed by physical gold stored in a vault. But in order for the gold to meet muster, the companies mining it have to “demonstrate efforts to respect the environment globally and combat money laundering, terrorist financing, and human rights abuses.” It’s an ESG way to get your fix of gold ETF investing. And it’s keeping pace with the other funds that will put any kind of gold in their vaults.

So when it comes to investing in gold using gold ETF investing, you’ve got a pretty wide variety of ways to do it. But there are other funds that open investors up to gold ETF investing. And those are composed of the companies that bring the gold to the surface: miners.

Gold ETF Investing: The Miners

And again, you’ve got a lot of choices when it comes to gold ETF investing and gold miners. There might even be more gold miner funds for gold ETF investing than there are gold funds for it, to be perfectly honest. And they give you lots of different ways to gain exposure to gold through said funds…

There are gold ETFs that give you exposure to big miners and gold funds that give you exposure to little miners. There are gold ETFs that give you exposure to a variety of miners of different sizes, too. There are some that are leveraged to produce two or even three times the daily return of their underlying assets. And there are some that let you bet against the market without ever selling short.

By size, the biggest of these is the VanEck Gold Miners ETF (NYSE: GDX). It’s up about 20% this year and gives you exposure to some of the largest mining companies in the world. It’s top five holdings and its portfolio allocations are as follows:

• Newmont Corporation (NEM) — 16%
• Agnico Eagle Mines Limited (AEM) — 10%
• Barrick Gold Corporation (GOLD) — 9%
• Wheaton Precious Metals Corp (WPM) — 7%
• Franco-Nevada Corporation (FNV) — 6%

GDX is big and it’s very liquid. That means it’s easy to buy and sell when you want to add to or exit your position. But it doesn’t have much exposure to many smaller miners. And those are the stocks with the biggest potential for upside…

So if you’re thinking about gold ETF investing and want exposure to small companies with big possibilities, then you should consider the VanEck Junior Gold Miners ETF (NYSE: GDXJ). When it comes to gold ETFs for investing in miners, it’s the second biggest by assets under management. And it’s also very easy to buy and sell, like its bigger brother. It gives you exposure to much smaller companies like:

• Kinross Gold Corporation (KGC)
• Alamos Gold Inc. (AGI)
• Harmony Gold Mining Co. Ltd. (HMY)
• Pan American Silver Corp. (PAAS)
• Evolution Mining Limited (EVN)

These companies trade at much lower valuations, but they’ve got more potential for big gains if they uncover a new asset or add to their current resource estimates. But it’s only designed to go up as much as its underlying assets go up. If you want to add some leverage and boost those returns, then you need to look elsewhere.

And one place you can find that exposure in your gold ETF investing is the Direxion Daily Gold Miners Index Bull 2x Shares ETF (NYSE: NUGT). Not only is it a mouthful to say, but it’s designed to deliver two times the daily performance of the VanEck Gold Miners ETF. And it does this by spreading its investments out between that gold ETF and gold futures, options, and repo agreements. It’s a lot riskier than the others I’ve mentioned and is probably best left to more experienced gold ETF investors.

The Bottom Line on Gold ETF Investing

The bottom line here is that whether it’s through individual gold companies, bars of physical gold, or gold ETF investing, you need to get a stake in this market. Gold is setting up for a potentially massive supercycle that could make today’s all-time high prices of $2,500–$2,600 look downright cheap.

That’s why I’ve been pounding the table about gold investing for over three years now. It’s why I’ve got all of my investors exposed and why I’m maintaining my own gold investments. And it’s why I’m adamant that everyone needs to get exposed to the gold markets and the companies that keep them going.

So, to help you on your way, I wanted to share a free report I recently put together for the investors in my premium community, Future Giants. It details a small gold miner that recently added a huge asset to its portfolio while the market wasn’t paying attention.

Now this little gold miner is sitting on gold potentially worth $3 billion–$4 billion. And that’s at today’s prices. Yet this company only commands a market cap around half a billion dollars. That’s a huge disconnect I expect to close as gold markets continue to run hot and more investors uncover this impressive opportunity.

So check out the report today. And make sure you get some exposure to gold through individual stocks, physical bullion, or gold ETF investing. You can thank me later when the profits come rolling in.