Gold funds, and falling Aussie dollar

[grah33]

i'm interested in gold funds on the asx. although the aussie dollar is falling now . would an investment in the fund GOLD (a little under 240 today), also suffer loss from aud currency loss? i'm guessing with QAU. gold fund, you gain from both gold rising and the usd rising over AUD?

 

[grah33]

ah ... i kind of got this wrong. it's this web page, telling me the wrong thing and confusing me. I'm thinking if AUD weakens, then that helps GOLD asx fund rise

let me know otherwise.

thanks

 

[Smurf1976]

I'm thinking if AUD weakens, then that helps GOLD asx fund rise

Another way to think of it is simply to look at the gold price in AUD and ignore the USD aspect of it altogether.

That said, for some practical examples to illustrate the point:

AUD is currently = USD 59c and gold is at AUD 2551.03 or USD 1507.10

If the gold price remained constant in USD but the AUD dropped to USD 50 cents then in AUD the gold price would be $3014.20

If the gold price remained constant in USD but the AUD dropped dramatically to USD 30 cents then in AUD the gold price would then be $5023.67

If the gold price remained constant in USD but the AUD rose to USD 70 cents then in AUD gold would be $2153.00

That said, a complicating factor with using gold as a hedge against currency movement is that the gold price is itself not constant against any currency.

If you specifically wanted a simple way to own USD as a currency hedge then the currency ETF's are one way to do that. USD (US Dollar), POU (British Pound) and EEU (Euro) trade on the ASX the same as any other share or ETF. That isn't the only way, just an easy one assuming you already have a brokerage account with cash in it.

Note that's for information only and is not a specific recommendation to buy or sell anything.

 

[qldfrog]

Yes overall, usually true
But be careful as some funds/etf are edged and so remove some of the aud/usd effect
If you used PMGOLD, you have direct exposition to the gold priced in AUD,if this is what you are looking for

 

[grah33]

Yes overall, usually true
But be careful as some funds/etf are edged and so remove some of the aud/usd effect
If you used PMGOLD, you have direct exposition to the gold priced in AUD,if this is what you are looking for

if aud weakens against US, PMGOLD and similarly GOLD asx fund goes up, right? assuming all else is the same

 

[qldfrog]

As long as these ETF are not hedged for USD increase against AUD
PMGOLD is not

 

[finicky]

If you specifically wanted a simple way to own USD as a currency hedge then the currency ETF's are one way to do that. USD (US Dollar), POU (British Pound) and EEU (Euro) trade on the ASX the same as any other share or ETF. That isn't the only way, just an easy one assuming you already have a brokerage account with cash in it.

Didn't know these etfs existed on the ASX, thanks

 

[grah33]

As long as these ETF are not hedged for USD increase against AUD
PMGOLD is not

nah , not hedged. sorry for asking a million times. i guess i like to feel assured . seeing the aud axis on the fund makes me question myself. should be good.

in short though, pmgold and gold fund aren't hedged. so if aud goes down, they benefit from it (increase)

 

[qldfrog]

at fixed gold price (usually in USD), if the AUD dollar falls, PMGold will increase; Gold funds expressed in AUD will go up as well if not hedged...
You need to check if there is currency hedging for any specific Gold fund you are interested in
Hope it helps
I am NOT a professional so please DYOR, but I hope this helps

 

[grah33]

As long as these ETF are not hedged for USD increase against AUD
PMGOLD is not

yeah ... pmgold has such small volume compared to GOLD fund. but both follow the price accurately enough from my browsing. how do they compare then?

 

[qldfrog]

Really up to you, PMGOLD is the Perth mint quasi government paper gold, ireally backed by physical gold or so they say
GOLD is not
Please make your own research
I will stop my input there in this thread.cheers