Gold prices are high right now and they are expected to stay high for the rest of 2022 Gold Investment, even 2023. One of the best ways to benefit from high gold prices is to buy these specific stocks and, in this video, we will talk about exactly how to do that. I want to keep this one short so if you’re interested, stick around and let’s get started. High gold prices are great and, in my previous video, I talked about why I think gold prices will stay high or even go higher. Still, gold has a massive, massive market cap of over $12 trillion dollars and it is hard as hell to move the price. So Gold Investment, if you want to make a really good profit, gold is probably not the asset for you. Instead, you can buy mining companies that specialize in gold, basically gold stocks.
Why? Well, those gold mining companies can afford to leverage themselves and benefit a lot more from rising gold prices than you or me. Plus, a lot of these companies have their business models built around gold prices of $1,200 to $1,400 and so on. Right now, we are expecting gold prices to average Gold Investment of $2,000 for the rest of 2022.
What that means is that those companies will get an incredibly massive boost to their earnings at no cost to them at all. No change of business is required! This means increased stock buybacks, increased dividends, and increased stock prices. Now, this is great, but it doesn’t help a lot if you are not familiar with the gold stocks currently on the market. Luckily for us, there is a way to get around that. How? Simple.
Just use an index fund. We have exchange-traded funds like GDX which is the VanEck Gold Miners ETF and RING which is the iShares MSCI Global Gold Miners ETF. If we compare their year-to-date performance to the price of gold, we can see that they have outperformed gold by almost 200%! As of today, the 25th of March, gold has gone up by 8.4% year-to-date whereas the GDX ETF has gone up 22.9%! Now, it’s important to know that the price of gold stocks is not perfectly correlated to the actual price of gold, but there is a strong relationship.
The expected future price of gold has a stronger correlation to gold-stock performance, but as I said, we are currently expecting high prices of gold in the next 12 to 24
months so this is good news for gold stocks. Also, gold stocks are more volatile than actual gold so they go up higher than gold in bull markets, but they also drop lower than gold in bear markets.
What you want to do is buy gold if you think that the price is more likely to drop and gold stocks if you expect the price to go up. But, there is an even better way to take advantage of high gold prices and that is by using a leveraged gold miners fund like NUGT which is the Direxion Daily Gold Miners Index Bull 2X Shares. Basically, NUGT is a leveraged fund that tries to double the performance of ETFs like GDX. Again Gold Investment, gold stocks are great in bull markets, and bad in bearish markets.
When you add leverage, you double the effect. NUGT is amazing during bull markets, but it is also really, really painful during bear markets so be extremely,
extremely careful with that. NUGT is best for short-term trades where you see a good bullish potential and you should avoid staying in it for the long term. I’ve personally made some really good gains with that ETF, but I’ve also taken an extremely nasty hit when gold prices dropped by almost 5% in a single day last summer. So, there you have it guys, this is how you can make the most of rising gold prices. Gold stocks and leveraged gold ETFs are great tools if you know how to use them, but you need to be very careful because they are a lot riskier than holding actual gold. Make sure you also check out my video on gold prices to know what to expect this year and also leave a like and a comment down below if you enjoyed the Gold Investment video. If this is your first time here, make sure you subscribe to join the newbie investors family! Thanks for watching and I’ll talk to you again soon!.