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Gold is safer than mining stocks: State Street’s Milling-Stanley




Gold is safer than mining stocks: State Street's Milling-Stanley

Gold beats stocks and bonds... but why?

Investors who want to weather a volatile market should opt for physical gold rather than gold stocks.

So says George Milling-Stanley, one of the world’s gold experts and chief gold strategist at State Street Global Advisors.

“One of the reasons I own gold bars is that I believe it gives me some protection against potential weakness in the stock market,” Milling-Stanley told CNBC’s “ETF Edge” this week. ‘When the stock market falls, gold mining stocks Remember, they are stocks, and they tend to fall with the general level of the stock market. So they don’t offer me that extra level of protection.”

Milling-Stanley’s company runs two exchange-traded funds that track the performance of the spot price of gold: the SPDR Gold Shares ETF (GLD) and SPDR Gold MiniShares Trust (GLDM).

They are differentiated by their gross expense ratios – 0.40% for GLD and 0.10% for GLDM – and it is this important distinction that also distinguishes the type of investor they attract, Milling-Stanley said.

“If you’re someone who wants to trade… or if you want to be a tactical player – that means you have to be able to move very, very quickly – then GLD’s liquidity after twenty years now means that it has very, very low trading costs compared to any other gold ETF,” he said. “If you have a million dollars and you want to put a million dollars in gold and leave it out there, then GLDM with its lower expense ratio makes more sense for you.”

As of Thursday’s close, GLD and GLDM were both up 15% this year.

Bullion, bitcoin and boomers

The idea that gold According to Milling-Stanley, a “fuddy-duddy” investment is no longer true. State Street 2023 Gold ETF Impact Study found that millennials had a larger portion of their portfolio invested in gold than older generations

The metal’s popularity among younger investors comes as bitcoin continues to attract assets from millennials and Gen SA alike Policy genius a study published this week found that millennials are more likely to own bitcoin than any other generation, and that Gen Z is more likely to own bitcoin than stocks, bonds or real estate.

But Milling-Stanley returned to the idea that gold and bitcoin compete across the board for assets.

“Bitcoin could be competition for the people who want to take a tactical position in gold and just wait for the price to go up and then sell. I think bitcoin could provide competition there,” he said. “But I don’t think bitcoin really competes when it comes to long-term strategic allocation, and that’s where I think gold really comes into its own.”


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