After a terrible 2022, cryptocurrencies seem to have finally found some upward momentum again. Bitcoin, the largest cryptocurrency in the world, is up 39% this year.
But CNBC’s Jim Cramer isn’t a fan.
“The charts, as interpreted by Carley Garner, suggest you need to ignore the crypto cheerleaders now that bitcoin’s bouncing,” he says, referencing analysis from DeCarley Trading’s senior commodity market strategist and broker Carley Garner.
Some say that cryptocurrencies can be used as a hedge against inflation. Bitcoin, for instance, can’t be printed out of thin air like fiat money. The number of bitcoins is capped at 21 million by mathematical algorithms.
Cramer, however, suggests using something much older to fight inflation.
“If you seriously want a real hedge against inflation or economic chaos, she [Garner] says you should stick with gold. And I agree,” the Mad Money host says.
Of course, if you’ve been following Cramer, you’d already know that he hasn’t been optimistic about the crypto world lately.
“The manipulation higher of crypto shows you this is truly a sham market,” he tweeted earlier in January.
If you share Cramer’s view and want to use gold as a hedge against inflation and uncertainty, here are three ways to gain exposure to the shiny metal.
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Of course, if you’ve been following Cramer, you’d already know that he hasn’t been optimistic about the crypto world lately.
“The manipulation higher of crypto shows you this is truly a sham market,” he tweeted earlier in January.
If you share Cramer’s view and want to use gold as a hedge against inflation and uncertainty, here are three ways to gain exposure to the shiny metal.
Bullion
Investing in gold has been considered the go-to inflation-fighting move.
It can also be a great hedge against uncertainty, as the value of gold is largely unaffected by economic events around the world.
And because of the precious metal’s safe-haven status, investors often rush toward it in times of crisis, making it an effective hedge.
The first method to invest in gold is the most straightforward one: if you want to own gold, just buy gold.
Most bullion shops carry a selection of gold bars and coins, so you can always find something that fits your investment needs. Just remember, if you want to invest in a large amount of gold and don’t want to keep the stash at home, you will likely need to pay for storage at a vault.
Gold mining companies
When the price of gold goes up, your gold bars and coins will be worth more. But gold mining companies can also benefit in such a scenario.
Barrick Gold, for instance, is a gold and copper producer operating mines and projects in 18 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia. In 2021, the company produced 4.4 million ounces of gold and generated net earnings of $2.0 billion.
There’s also Newmont (NYSE:NEM), another heavyweight player in the gold mining industry and the only gold producer in the S&P 500. Its portfolio of assets span North and South America, Australia, and Africa. The company also produces copper, silver, zinc and lead.
Higher gold prices can allow miners to earn higher revenues and profits, which could translate to higher share prices. However, each company is different so make sure to do your research and find the ones that can keep costs down and run efficient operations.
ETFs
Exchange-traded funds have risen in popularity in recent years. They trade on stock exchanges, so buying and selling them is very convenient.
Investors can use them to get a piece of the gold action, too.
The most well-known ETF in this space is the SPDR Gold Trust (NYSEARCA:GLD), which is designed to track the price of gold. GLD is backed by physical gold bullion sitting at its vaults and has an expense ratio of 0.40%.
The iShares Gold Trust (NYSEARCA:IAU) is another ETF that allows investors to easily track the price of the yellow metal. It holds gold bullion — just like GLD — but has a lower expense ratio at 0.25%.
There are also ETFs that provide exposure to gold mining companies.
For instance, the VanEck Gold Miners ETF (NYSEARCA:GDX) tracks the NYSE Arca Gold Miners Index. It has a portfolio of gold mining stocks, with Newmont and Barrick Gold as its two largest holdings.
GDX has an expense ratio of 0.51%.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source: https://finance.yahoo.com/news/truly-sham-market-jim-cramer-110000759.html