Gold poses more difficulty than almost any other financial asset when it comes to determining fair value. With gold, reasonable people can have sharply different views of the value.”To see how sharply those views differ, consider three different ways to value gold: as an inflation hedge, as a hedge against political uncertainty and as a way to get portfolio diversification. If an investor nevertheless should insist on basing gold-trading decisions on inflation, he or she currently should be out of gold, according to Mr. Erb. And sure enough, according to Prof. Harvey, gold shows a modest historical correlation with the global version of the EPU. To invest in gold mining companies, the largest ETF is VanEck Vectors Gold Miners ETF (GDX), with $11.5 billion in assets and a 0.52% expense ratio.

Source: Wall Street Journal March 06, 2017 03:05 UTC