Six Precious Metals ETFs to Exploit Weak Dollar Secular Trend
Sunday, March 14th, 2010Dan Pritch submits:
Precious Metals ETFs may play an important role in this environment. After years of a slowly deteriorating US dollar, the greenback found some footing during the financial crisis and is now benefiting from the financial woes in Greece which may well boil over into other Eurozone countries. However, this near term calamity doesn’t address the underlying fundamental problems with US currency stability, especially against rapidly growing and lower leveraged emerging markets. With the US dollar likely to continue to lose buying power in terms of global currencies in the coming years, investors have a few tools at their disposal to exploit this secular trend.
First, there are multiple currency ETFs which focus on either an individual country or even a basket of countries that rise when the US dollar falls in parity. However, for those looking to both hedge a weaker dollar, hedge inflation AND benefit from the sporadic panic moves that occur when a Black Swan event occurs in the Us like a financial crisis or a terrorist attack, there are precious metals. Historically, investors had to take physical custody of gold, platinum, silver and other commodities, but now there are several ETFs that make physical custody a thing of the past. Evidently, investors are eager given that we saw commodity ETF inflows more than double in 2009.
