NEW YORK ( TheStreet) -- I have consistently advised investors to gain exposure to gold through the use of various ETF products. With economic turmoil still raging across many regions of the globe, prices have risen to staggering all-time highs, making for an attractive destination for frightful investors.
With discussions heating up this week in light of the G20's meeting, the prospects for the yellow metal and the funds designed to track it appear promising.
In a Sunday opinion piece for the Financial Times, World Bank President Robert Zoellick proposed that leading world economies may want to consider using gold as a standard for their currency valuations in order to inject stability.Zoellick's surprising suggestion is already drawing criticism, fanning the fiery debate over whether the world would benefit from a return to the gold standard. According to The Wall Street Journal, UBS has already called the idea of returning to the gold standard absurd. The World Bank president's statement has fueled conversation but it is unclear if and how it will influence the discussions when the G20 representatives meet in Seoul, South Korea later this week. Still, it is interesting to consider which funds would benefit in the event that a gold standard is adapted. Moving away from fiat currencies in favor of a gold standard would likely benefit gold-related investing products across the board. Today, investors can gain access to gold through exposure to bullion and miners. Bullion-backed funds such as iShares Gold Trust (IAU) and SPDR Gold Shares (GLD) track their own respective stockpiles of physical gold held in vaults around the world. These funds are designed to rise and fall with the changes in the prices of the actual metal. In the event that central banks around the world agree to adapt a gold standard, they will have to increase their stockpiles of the metal. This uptick in demand would, in turn, drive prices higher, benefiting IAU, GLD and other products boasting exposure to physical gold bars and coins. If a gold standard is implemented and central bank demand for gold takes off, companies such as Barrick Gold (ABX), Gold Fields (GFI) and Goldcorp (GG) which are responsible for unearthing the commodity will see a lift as well, benefiting from rising prices. A number of ETFs dedicate their portfolios to companies in this market space. The two most popular products which investors will want to keep an eye on will be the Market Vectors Gold Miners ETF (GDX) and Market Vectors Junior Gold Miners ETF (GDXJ).
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV