Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
US Overdosing on Debt - 19th Mar 19 -
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19

Market Oracle FREE Newsletter

Stock and Finanacial Markets Trading Analysis Worth

Invest in Gold with Mining ETFs

Commodities / Gold and Silver 2010 Nov 11, 2010 - 09:43 AM GMT

By: Ron_Rowland

Commodities

Best Financial Markets Analysis ArticleDo you like to dig? I have to admit, it’s not my favorite thing. But if I knew there was gold in the ground I might think differently.

In fact, there is gold in the ground — and plenty of other valuable minerals, too. The hardest part is finding it. However, the digging gets a lot easier when you know where to aim.


Exchange-traded funds are a great way to guide your shovel toward profits in the mining sector. Today I’ll tell you why. I’ll also name several ETFs to consider if you want to get involved in this potentially highly profitable business.

Before we go any further, we need to make an important distinction …

Mining sector ETFs are not the same as ETFs that are based on physical metals. Mining stocks are still stocks. Their performance is related to the underlying commodities — but not always. For instance, gold and silver mining stocks can go down even if gold and silver bullion go up. Or the miners can be up when the metals are down.

There’s Gold in These ETFs

Gold is the ultimate store of wealth.
Gold is the ultimate store of wealth.

Gold’s allure is ancient. People have been searching for it, mining it, stealing it, and trading with it for thousands of years. Even in a world of paper and electronic currencies, gold is still widely accepted as the ultimate store of wealth.

Unfortunately, gold isn’t so shiny in its natural state. Usually it is found in tiny or even microscopic particles, deep underground or dispersed across large areas. This scarcity is what makes gold so valuable.

You might not be a prospector yourself, but you can still share in the profits by bankrolling today’s forty-niners. Here are three ETFs that focus on gold mining stocks:

  • Market Vectors Gold Miners (GDX) is the most-active ETF in this category and also the most liquid. It concentrates on the liquid, large-cap stocks of companies in the gold mining business.
  • Market Vectors Junior Gold Miners (GDXJ) zeros in on small-cap gold producers. These are riskier stocks, but they also have tremendous potential.
  • Global X Gold Explorers (GLDX) is a new fund that tries to get even more specialized. It owns early-stage companies that are still looking for gold — and haven’t necessarily found it yet. As you might imagine, this makes GLDX a high-risk play with potentially great rewards.

Gold isn’t the only precious metal, of course. Let’s widen our view to look at some others …

Silver, Platinum, Copper and More

Silver and platinum are also very rare, and throughout history they have been used in much the same way as gold. Silver is often thought of as the “poor man’s gold.” And platinum is even more valuable than gold in some ways.

Then there is copper …

Wire products are a major user of copper.
Wire products are a major user of copper.

Used primarily for industrial purposes, copper is often found alongside silver. For this reason it is sometimes thought of as a semi-precious metal. Pennies used to be pure copper; today they are mostly zinc with a thin copper plating.

You’ve probably heard a lot of buzz lately about “rare earth” metals. These are super-rare minerals needed for high-tech manufacturing. Some of them are extremely valuable — and extremely scarce. Mining for them can be a very profitable business.

You can take your pick of mining stocks focused on all these metals. If you want to go the ETF route — which I highly suggest — here are some to consider:

  • Global X Silver Miners (SIL)
  • First Trust ISE Global Platinum (PLTM)
  • Global X Copper Miners (COPX)
  • First Trust ISE Global Copper (CU)
  • Market Vectors Rare Earth/Strategic Metals (REMX)

The Hottest Metal: Uranium!

Uranium is found in low levels within rocks, soil and water and is more common than silver. The ore is crushed and refined into the pure metal.

Today uranium’s primary use is in nuclear reactors. One kilogram of uranium can provide as much energy as tons of coal. That’s a lot of power!

Yes, there are some environmental and safety concerns. But fossil fuels aren’t so clean, either.

Uranium is a big source of electricity.
Uranium is a big source of electricity.

As a result, I expect uranium demand will continue to increase — and the companies involved in producing it will continue to profit. Which stocks?

Right now the uranium industry is dominated by a handful of companies. This could change quickly as the business matures.

A good way to cover all the bases in uranium is with a new ETF, Global X Uranium (URA). URA just came out last week but trading has been heavy so far.

There are many other ETFs with varying levels of exposure to the mining sector. Those I’ve named here are only a small sample. The list is growing quickly as ETF sponsors try to get a piece of this fast-growing niche.

Be aware that mining stocks, other than a few in the large-cap category, tend to be small and illiquid. The same applies to the ETFs that own these stocks. Watch the trading volume and use a limit order whenever you buy or sell.

Best wishes,

Ron

P.S. To all you veterans out there, Happy Veteran’s Day! Thank you for your service.

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules