We all know that the credit crunch is having a major affect on currency. However, for those who would like to allocate a certain strategic percentage to gold, the monthly systematic investment plan route in gold ETFs appears to be more cost effective than buying directly or the gold saving schemes offered by jewellers. The objective of a gold ETF is to provide gains that closely correspond to returns delivered by gold as an asset class.
Fidelity charges a quarterly storage fee of 0.125% of the total value or $3.75, whichever is greater. Storage fees are prebilled based on the value of the precious metals in the marketplace at the time of billing. For more information on these other investments and the cost of a specific transaction, contact Fidelity at 800-544-6666. Minimum fee per precious metals transaction: $44. Minimum precious metals purchase: $2,500 ($1,000 for IRAs). Precious metals may not be purchased in a Fidelity Retirement Plan (Keogh), and are restricted to certain types of investments in a Fidelity IRA.
A recent survey of 1,000 people found that one in six Americans bought gold or other precious metals in the last three months, and about one in four were seriously thinking about it. On Robinhood, the popular online trading platform, the number of users holding two of its largest gold funds has tripled since January.
This sounds like a good thing, but when a recession hits and economic production goes down, the industrial demand for silver falls, and the price of silver usually falls. This makes it too correlated with equities to be useful for this primary purpose of offering downside portfolio protection. This is true for platinum and palladium as well; they generally decline in price during recessions like equities because they are used in industry, such as for catalytic converters on automobiles.
While short-term fluctuations in gold prices get a lot of attention, gold is relatively stable as a long-term investment. The annualized volatility of gold was only slightly higher than the annualized volatility of the S&P 500 during the 30-year period between 1989 and 2019.