Best ETF Gold Fund – GLD (If You Must)

A quick note:  I do not necessarily advocate investing in gold.  That said, some prominent investors believe investing in gold is a good hedge against inflation.  Harry Browne’s Permanent Portfolio, for instance, has had pretty decent success by incorporating gold into his investment strategy.  Do your own homework before making a decision to invest in any asset class, including gold. And don’t forget, not even the best gold funds will do well when the price of gold plummets.

Introducing GLD – The Best Gold ETF?

If you’re interested in gold investing as a hedge against fiat currencies and government mismanagement, probably the most popular and best ETF gold fund to buy is GLD – otherwise known as SPDR Gold Shares. What stands out about this ETF is that it directly tracks the price of gold by investing in actual gold bullion. This might sound obvious, but many gold Exchange Traded Funds (ETFs) actually don’t.   Most ETFs trade gold futures contracts.  While nobody knows how gold will fare in the future as an investment option, GLD is likely to track the actual spot price of gold more reliably than other gold ETFs since it physically holds bullion, making it perhaps the best gold ETF.

Where Are Gold Prices Headed?

Nobody can accurately predict future prices of any asset.  That said, there are currently two schools of thought regarding gold prices. One is that deflation has already set in, which will be bearish for gold. Some even point to the ads on television, indicating that once the public is involved, it’s time to get out.

Others feel that with the government printing so much money, the price of gold will continue to rise since gold is usually considered a hedge against the dollar. Will the U.S. need to keep the dollar weak in order to compete (ex: more exports)? Or will our economy do well enough that the dollar will begin to strengthen against other currencies (which could, in turn, be bearish for equities)?  It’s complicated.

Most gold bulls and bears agree that gold should continue it’s upward trend for the medium term and internationally. Since gold is a global commodity, you can buy pretty much any gold ETF; India, USA, Great Britain, and Canadian based ETFs should all do reasonably well. But for investors expecting hyperinflation, GLD is probably the best long-term gold play (again, because it holds physical bullion instead of just futures).