Is Gold the Favored Metal?

So far in 2010 the S&P 500 Index has experienced a 9.50% return while the GreenHaven Continuous Commodity Index (GCC), an equal weighted commodity index, has seen a gain of nearly 17.08%. Much of this year’s return has been driven by metals, more specifically; precious metals. And, while commodities have outperformed equities this year, commodities have been an area of strength for the past decade.

The media has given you the impression that Gold was leading the precious metals race, while in actuality we find that Palladium and Silver are actually outperforming gold by a substantial margin. And while fear-mongers and gold peddlers are urging you to buy gold (and guns) and store it in your backyard, both Tin and Copper have beat the S&P 500 and Gold, and Cotton is up 85.78% for the year. So this may be a good time to buy linens, particularly high count Egyptian cotton sheets before prices increases work through the system.

Gold, while up 26.84% for the year is underperforming a basket of 20 Precious Metals related company’s stocks, which, as an aggregate, are up 36.55% for the year. So, a case can easily be made for turning to commodity-related equity ETFs as a way to get exposure to both commodities and equities. Now that we know what choices we have, the question is, "should you own the commodity ETF or a commodity-related company ETF?"

For answers contact me-

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