Invest In Gold With Gold Mine ETF

The shares of gold mines move much faster than the price of gold itself. The reason for this is that if the gold price falls, many mines immediately go into the red. With a gold price that is low for a longer period of time, there are a lot of things that almost fall over and the shares are worth almost nothing.

How to Invest in Gold (ETF, CFD, Gold Miner)

A gold mine has to invest a lot for years before gold comes out of the mine. This often causes a somewhat shaky situation. If the gold price rises, a completely different situation suddenly arises.

The gold mine comes from the red numbers and is going to make a profit. But then suddenly something else counts. That is all the gold that is still in the ground and only has to be removed.

How Does It work?

This works as follows: If a gold mine has a break-even of 1200 dollars per ounce and the gold price falls to 1100 then the mine is worth nothing. Because with all the gold that is lost, 100 dollars per ounce must be added. How much gold there is in the mine is unimportant because it is loss-making.

But when the gold price rises to 1500, people suddenly look at all that gold in the ground. Every ounce then counts as x 300 dollars. Investing in gold mines with an ETF therefore provides enormous leverage should the gold price rise sharply.

It is a well-known fact that with shares of a gold mine you buy much more gold per Euro than you buy with birth bars. Conversely, it also works if the gold price falls you should not have invested in gold mines.

So I do both and an ETF that invests in physical gold and an ETF that invests in gold mines. I also trade actively in both to benefit from small bumps. I see gold as the investment for the next 5 to 10 years.