I believe that this irrational circumstance will eventually find a logical basis. And when it does, investing in gold could prove to be very affordable. It must be said that since the beginning of this decade, gold prices have only risen by 10%. It might seem little, especially considering that it is a precious metal. But it is also true that the Dow Jones index has risen by over 130%.
Despite the bull market, there can be no talk of an underperformance of gold stocks. First, the US dollar index (USDX) , which is the index (or measure) of the value of the US dollar in relation to a basket of foreign currencies, has collapsed since President Donald Trump took office. Since the beginning of its administration, the dollar index has lost about 5% in value. The losses would have been much worse had it not been for a recent hike.
A weakening of the dollar typically corresponds to higher commodity prices; hence, Brent oil has gained around 40% since the first day Trump sneaked in as president. By contrast, gold has only risen 2% since Trump took over the helm of the United States and, for the current year, bullion prices have lost around 6.5% of their value.
The Best Stocks To Invest In Gold
1. Goldman Sachs Gold BEes
The best Gold Exchange Traded Fund in India according to AUM figures is the Goldman Sachs Gold BEes. At the end of December 2015, Goldman Sachs Gold BEes had a declared AUM figure of Rs. 1,636.65 crore. The NAV of this scheme stood at Rs. 2,726.76 per unit on February 11, 2016.
2. Reliance Shares Gold ETF
Reliance Mutual Fund’s R*Shares Gold ETF has the next best AUM of Rs. 1,304.84 crore, at the end of December 2015. The NAV of this scheme on February 11, 2016 was Rs. 2,652.32 per unit.
3. SBI Gold ETF
State Bank of India Mutual Fund’s SBI ETF Gold scheme registered an AUM of Rs. 917.58 crore in December 2015. Its NAV was Rs. 2,797.71 per unit on February 11, 2016.
4. HDFC Gold ETF
HDFC Mutual Fund’s HDFC Gold ETF is a product that declared Rs. 561.67 crore at the end of 2015. The Net Asset Value of this product was Rs. 2,778.18 per unit on February 11, 2016.
5. UTI Gold ETF
UTI Mutual Fund’s UTI Gold ETF has an AUM of Rs. 446.30 crore, as in December 2015. Its NAV was Rs. 2,729.72 per unit as on February 11, 2016.