Gold And Silver's Place In An ETF Portfolio

  • GLD and SLV prices are at their lowest since May. Now may be a good time to consider diversifying your ETF portfolio to include precious metals.
  • Gold and silver can be volatile in the short and mid-term, but over long periods of time, they are a protection against inflation and geopolitical risk.
  • Diversifying 5% of your ETF portfolio in gold and silver gives exposure with reduced costs and increased liquidity.
Along with the election of Donald Trump as the 45th President of the United states came uncertainty in the immediate future of inflationary assets. As the markets begin to react for the longer term, U.S. bond yields were set to a 15-year high on Friday. Markets seem to be increasingly expecting a December increase of Fed interest rates and investors are beginning to price them in. We're also seeing interest rate expectations help boost financial sector stocks. The dollar is strengthening and, simultaneously, indexes are setting record highs. Markets are mostly reacting positively, but what if the experts are wrong? There are still a lot of uncertainties swimming around President-elect Trump's policy proposals. Along with those uncertainties come further blurring of winners and losers of Trump administration policies. Prior to the election, markets were reacting highly negatively to the prospects of a Trump presidency. After his surprise upset, markets reacted the opposite way to the same news. The fact of the matter is nobody knows for certain the impact Trump's policies will have on the nation's publicly-traded companies. The picture appears to be getting somewhat clearer as appointments become more public; however, financial markets, the media, and academia all failed to predict Trump's surprise victory to begin with, so, now is the perfect time to hedge bets in your ETF portfolio with a historically well-known store of value and protector of wealth - gold.
Why an ETF Portfolio?
With the growth of ETFs over the last half decade, constructing a highly-diverse investment portfolio with only a handful of low-cost exchange-traded securities has not only become a possibility, but also a growing reality. I've previously discussed a group of 6 ETFs that provide you a low cost well-diversified portfolio, which provides exposure to U.S. & emerging market equities, real estate, and bonds. Protecting your market-based assets through diversification can help you avoid the shortfalls of picking winners and losers and greatly reduce the risks of your holdings.
Gold and Silver's Place in An ETF Portfolio
Strong equities markets tend not to be very good for gold, but gold has historically been seen as a hedge against uncertainty. If you look back at 2013-2015, there wasn't much volatility in the marketplace. In January & February of 2016, volatility increased, and gold prices rose, as it once again was seen as safe haven. Silver has been seen as gold's little brother. It moves similarly to gold, generally speaking; however, its price can be more affected by demand for industrial use than gold. It has a precious metal aspect to it along with some of the features of other metals. Currency devaluation in countries likeChina and India are likely to boost demand for gold and silver globally. Geopolitical tensions drive up demand, and President Trump is suggesting he will shake things up in Washington. There are plenty of other reasons you'd want to allocate part of your assets into precious metals. Gold and silver have been a great store of value - perhaps, the most historically prominent store of wealth in world history.
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Gold has a historically low to negative correlation with most broad asset classes. Allocating just 5% of our assets into two precious metal ETFs gives us exposure to the historical upside associated with gold and silver during times of geopolitical uncertainty by reducing our bond and real estate exposure. If your portfolio is more aggressive, you can consider allocating a bit more into silver, which has the added upside potential of an increase in global manufacturing of electronic devices. Below is a chart on how we can expand our six-ETF portfolio to add gold to our portfolios.
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The SPDR Gold Trust ETF (NYSEARCA:GLD) offers a low expense ratio of 0.4% and an average volume of well over 10 million shares traded per day. For the last 10 years, GLD has returned an annualized average of 6.17%, totaling 81.95%. GLD set its 10-year high in 2011 at $184.59, a long way off its current trading price of $113.67. Gold can rally and retreat based upon current events, but returns are more stable in the long term. As far as investing in physical gold trusts, GLD is one of the most popular gold trusts. Year to date, gold has rallied after posting negative returns for the prior 3 years. GLD is trading at its lowest price since January, so now is as good of a time as ever to start diversifying an ETF portfolio into gold assets.
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The iShares Silver Trust ETF (NYSEARCA:SLV) gives you exposure to silver with a slightly higher expense ratio of .05%. Silver is more volatile than gold, but its historical value as a money and store of wealth, coupled with its industrial uses, provide two separate avenues for growth as well as volatility. The ETF portfolio above allocates between 2-3% of holdings in silver. Over the last 10 years, SLV has demonstrated more volatility than gold. One great long-term opportunity for silver lies in its industrial use. Almost all electronics contain some silver. Its excellent electrical conductivity makes it the natural choice of electronics manufacturers for use in things like circuit boards, switches, televisions, smartphones and tablets. Over the last decade, silver has been on a wild ride which is why you should only expose a small portion of your portfolio in silver assets. Over the last ten years, silver has returned an average of 3.41% annually. It's historically been known as a store of value, and there are definitely upside opportunities for silver in the future. The volatility in the short and mid-term can put a dent in your portfolio, however. Therefore, silver is really a long-term play for those patient enough to live through the volatility and sell when markets permit profit taking. SLV is at its lowest levels since May. Putting aside 2-3% of your portfolio into silver with a 10-year long-term projection adds exposure to silver along with your new gold position. You may even be able to take profits during rallies.
10-Year Annualized Return on SLV
SLV Returns

The Bottom Line
Gold and silver have historically been seen as money and a store of value. Relative to U.S. currency, gold and silver see increases in prices during times of instability in financial markets and fiat currencies. As a result, the risks associated with potential for political uncertainty stemming from a new U.S. Executive Administration can be hedged by adding two small positions of GLD and SLV to our portfolio. Over a lifetime, fewer assets have the tangible store of value and wealth protection. By adding 5% to our portfolio of ETFs, we are limiting our downside risks, while still taking advantage of long-term opportunities in gold and silver. Of course, you could buy physical gold and silver, but buying GLD and SLV is easier to initiate a position in as well as manage going forward. Silver can be bulky and gold can be difficult to sell locally. Storage and protection costs must be accounted for as well. GLD and SLV do a great job of tracking gold and silver and have a place in any long-term driven portfolio of well-diversified assets.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.


Científicos descubren cómo una bacteria convierte toxinas en oro

pixabay.com / skeeze

En un estudio realizado en el año 2009, expertos alemanes y australianos demostraron que la bacteria C. metallidurans puede producir oro de manera biológica.

Un equipo de científicos alemanes y australianos ha desentrañado los procesos molecurales que tienen lugar en el interior del bacilo C. metallidurans, una bacteria capaz de digerir metales tóxicos y convertirlos en oro. Los investigadores difundieron los resultados en un estudio publicado el pasado miércoles. El equipo científico está formado por expertos de la Universidad Martín Lutero (UML), de Halle-Wittenberg, en Alemania, la Universidad Técnica de Munich y la Universidad de Adelaida, en Australia.

La bacteria C. metallidurans vive principalmente en suelos con alto contenido de metales pesados. Con el paso del tiempo, algunos minerales se descomponen y liberan metales pesados tóxicos e hidrógeno en su entorno. Pero más allá de la prensencia de estos últimos, "las condiciones de vida en esos suelos no son malas. Hay suficiente hidrógeno para conservar energía y casi no hay competencia. Si un organismo opta por sobrevivir aquí, tiene que encontrar una manera de protegerse de estas sustancias tóxicas; la bacteria C. metadillurans lo ha hecho", asegura Dietrich H. Nies, profesor de microbiología molecular en la UML y autor principal del estudio.

El oro se introduce en la bacteria del mismo modo que lo hace el cobre. El cobre es un elemento vital para la bacteria C. metadillurans, pero es tóxico en grandes cantidades. Cuando las partículas de cobre y oro entran en contacto con dicha bacteria, se produce una serie de procesos químicos. Si se hallan ambas en el interior de la bacteria, se suprime la enzima CupA, que es la encargada de expulsar las partículas de cobre, en tanto que los compuestos tóxicos de cobre y oro permanecen en el interior de la célula.

Las bacterias activan entonces la enzima Cop A, la cual transforma los compuestos de ambos metales en  formas originalmente díficiles de ser absorbidos, de modo que menos compuestos de cobre y oro entran en el interior de la célula. En consecuencia, se elimina el exceso de cobre, y los compuestos de oro, que son díficiles de absorber, se convierten en pepitas en el área exterior de la célula.

La bacteria C. metallidurans juega un papel fundamental en la formación del llamado oro secundario, que se genera en la naturaleza a raíz de la descomposición de minerales de oro primarios. El estudio realizado por el equipo científico germano-australiano ha proporcionado información relevante sobre el ciclo biogeoquímico del metal precioso. En un estudio realizado en el año 2009, los científicos habían ya demostrado que la bacteria C. metallidurans puede producir oro de manera biológica. Pero desconocían el porqué de este proceso de conversión. 


Staggering e-waste numbers revealed in grim new report

© Global E-waste Monitor 2017

Picture this: In 2016 the world generated enough e-waste to fill a line of 18-wheelers from New York to Bangkok and back.

Last year, we “smart” humans threw away 44.7 million metric tonnes of things with a plug or battery – everything from refrigerators and television sets to solar panels and mobile phones. To put that in more visual terms, imagine 1.23 million 18-wheel trucks filled to capacity with e-waste – enough trucks to line up bumper-to-bumper from New York to Bangkok and back. (A metric tonne is equal to around 1.1 US tons, or about 2,204 pounds.)

Given that we generated 8 percent more than we did just two years prior, things aren’t looking very good. And in fact, according to a new UN-backed report, we can expect to see a further 17 percent increase of e-waste, to 52.2 million metric tonnes, by 2021. E-waste is the fastest growing part of the world's domestic waste stream.

© Global E-waste Monitor 2017

The new report, Global E-waste Monitor 2017 is a group effort between the United Nations University (UNU), represented through its Sustainable Cycles (SCYCLE) Programme hosted by UNU's Vice-Rectorate in Europe, the International Telecommunication Union (ITU), and the International Solid Waste Association (ISWA). The basic gist is that falling prices have made electronics affordable for most people worldwide; meanwhile, people in wealthier countries are being increasingly lured to buy early equipment replacement or new things altogether.

Here’s how it looks by the numbers:

9: The number of great pyramids that are equal in weight to the amount of e-waste generated last year.

20 percent: The amount of that e-waste that was recycled in 2016.

4 percent: The amount of 2016 e-waste known to have been thrown into landfills.

76 percent: The amount of 2016 e-waste that was incinerated, in landfills, recycled in informal (backyard) operations or remains stored in our households.

$55,000,000,000: The value of gold, silver, copper, other high value recoverable materials that were not recovered.

© Global E-waste Monitor 2017

6.1 kilograms (13.4 pounds): The average amount of e-waste generated globally per person in 2016.

11.6 kilograms (25.5 pounds): The average amount of e-waste generated in the Americas per person in 2016.

17 percent: The amount of e-waste recycled in the Americas in 2016.

3: The number of electrical and electronic equipment categories that account for 75 percent of global e-waste by weight, and also expected to see the most growth:

Small equipment, like vacuum cleaners, microwaves, ventilation equipment, toasters, electric kettles, electric shavers, scales, calculators, radio sets, video cameras, electrical and electronic toys, small electrical and electronic tools, small medical devices, small monitoring and control instruments.Large equipment, like washing machines, clothes dryers, dish-washing machines, electric stoves, large printing machines, copying equipment, photovoltaic panels).Temperature exchange equipment, like refrigerators, freezers, air conditioners, heat pumps.

© Global E-waste Monitor 2017

7.4 billion: The world population.

7.7 billion: The number of mobile-cellular subscriptions.

36 percent: The number of Americans who own a smartphone, a computer, and a tablet.

2 years: The far end of an average smartphone lifecycle in the USA, China, and major EU countries.

1 million tons: The weight of all the chargers for mobile phones, laptops et cetera, produced each year.

© Global E-waste Monitor 2017

If there's a bright side to this dark mess, it's that more countries are adopting e-waste legislation, the report says, noting that 66 percent of the world's people live in the countries that have national e-waste management laws; an increase of 44 percent since 2014.

Also, although we’re making more and more stuff, some of it is getting smaller. Waste for small IT and telecommunication equipment (mobile phones, GPS, pocket calculators, routers, personal computers, printers, telephones, et cetera) is expected to grow less quickly by weight due to miniaturization.

Likewise, little growth is expected for lamps (fluorescent lamps, high intensity discharge lamps, LED lamps). And as heavy CRT screens for televisions, monitors, laptops, notebooks, and tablets are replaced with flat panel displays, e-waste from this category is expected to decline.

Just as Tom Waits sings, “you can never hold back spring,” so too can we not hold back digital progress. But we most certainly can make an effort to better design components used in electrical and electronic equipment, as well as devise better methods for recycling and recovering. All of which this report calls for.

"We live in a time of transition to a more digital world, where automation, sensors and artificial intelligence are transforming all the industries, our daily lives and our societies,” says Antonis Mavropoulos, President, International Solid Waste Association (ISW). “E-waste is the most emblematic by-product of this transition and everything shows that it will continue to grow at unprecedented rates. Finding the proper solutions for e-waste management is a measure of our ability to utilise the technological advances to stimulate a wasteless future and to make circular economy a reality for this complex waste stream that contains valuable resources. But first, we need to be able to measure and collect data and statistics on e-waste, locally and globally, in a uniform way. The Global E-Waste Monitor 2017 represents a significant effort in the right direction."

And of course, on a consumer level we can fight the cause of the problem: We can treat our equipment as if it were precious, not disposable. We can resist the siren song of shiny new things, take care of what we have, repair when we can and donate when we can't ... and when all else fails, recycle responsibly.



Ciudad Juárez.- La Dirección de Ecología ha logrado reciclar un total de 69 toneladas de residuos electrónicos para evitar que fueran a dar al relleno sanitario y contribuyan a la emisión de gases venenosos, esto lo dio a conocer Jürgen Ganser Carbajal titular de la dependencia.

Informó que las 65 toneladas de aparatos electrónicos fueron acumuladas en los últimos tres meses gracias a la campaña “Juárez Recicla”; mientras el programa “Ponte las Pilas” para el reciclaje de baterías electrónicas ha logrado acumular 4 toneladas.

Explicó que en la campaña Juárez Recicla, personal de la dependencia colocó cuatro centros de acopio con contenedores especiales para la recepción de los residuos, habiendo capacitado al personal responsable sobre el manejo apropiado de estos materiales.

“Cuando una pantalla de televisión o una lámpara se rompe libera un gas dañino para la salud, por eso ofrecimos a los un curso de cuatro horas sobre como reconocer los residuos electrónicos, así como las medidas de control y seguridad en su manejo”, comentó el funcionario.

Los contenedores de Juárez Recicla están ubicados en las estaciones de bomberos número 2 (parque Borunda), número 4 (calles Faraday y Gómez Morín), número 8 (Barranco Azul y Eje Vial Juan Gabriel); y uno más en las oficinas administrativas José María Morelos y Pavón (avenida Lincoln).

Dijo además que la campaña Ponte las Pilas ha recibido muy buena aceptación y participación de la comunidad, quien tomando conciencia del riesgo para el medio ambiente y para la salud contribuyó a reunir 4 mil kilógramos de baterías electrónicas.

Para esto, personal de la Dirección de Ecología colocó un total de 60 contendores para la recepción de baterías en las unidades administrativas “Lic. Benito Juárez” y “José María Morelos y Pavón”, en los campus de la Universidad Autónoma de Ciudad Juárez y en 50 tiendas de auto servicio.

Las 65 toneladas de aparatos fueron entregados a la empresa Ecorecikla, quien se encargó de reciclar y rehusar los componentes químicos de los residuos; mientras que las baterías fueran trasladadas a Nuevo León para su confinamiento según se informó


Recicladores de residuos electrónicos se transforman en una empresa social

Empezar a andar. Emprendedores que trabajan en el Centro de Convivencia Barrial (CCB) del barrio Molino Blanco y que depende del Distrito Sur, celebraron la firma un convenio de trabajo que permitirá el desarrollo y crecimiento en el reciclado de residuos electrónicos.

En efecto, en el CCB, enclavado en el sur del sur rosarino, funciona, desde 2014, el programa de reciclado de Residuos de Aparatos Eléctricos y Electrónicos (Raee), el cual firmó un convenio entre la Municipalidad de Rosario y Njambre (ver aparte), con la meta de convertirse en una empresa social.

La tarea del CCB es recibir los residuos electrónicos e informáticos domiciliarios que la Municipalidad recolecta en forma gratuita los últimos viernes y sábado de cada mes y procesarlos.

En este sentido, Antonio Lugo, coordinador del programa explicó que “aquí se recibe el material, se clasifica y se selecciona lo que pueda servir”. Y agregó: “Una parte se utiliza para armar nuevos equipos y el resto se limpia, se manda a moler y con ese producto molido se desarrolla un material reciclado que se vende y genera ingresos”.

Todos los jóvenes que trabajan en este proyecto realizaron una capacitación intensiva de Reciclado de Residuos Informáticos que se dicta en el CCB y que fue el puntapié inicial del proyecto de trabajo.

En este marco, Lugo señaló que “todo esto lo inició el ingeniero Eduardo Rodríguez con un curso de reparación y reciclado de PC, a partir de un convenio de la Municipalidad con el Cecla (Centro de Capacitación Laboral para Adultos)”. “Rodríguez es el profe que todavía da el curso de reciclado y un poco el padre de todos los chicos”, dice Lugo.


En este marco, para el programa y todos los actores involucrados, la concreción del convenio con Njambre es fundamental y el principio de un paso fundamental hacia la concreción de empresa social.

La historia reciente señala que el pasado 28 de abril fue un día clave para los recicladores de Molino Blanco, ya que la intendenta de Rosario Mónica Fein y el secretario de Economía Social, Nicolás Gianelloni, firmaron el acuerdo tripartito con Njambre y el CCB.

Así, el compromiso es, en el plazo de un año, convertir el espacio en una empresa social basada en el reciclado de residuos informáticos y electrónicos, generando un modelo de negocio sustentable que cuide el medio ambiente y cree condiciones de trabajo dignas.

Esto significa la posibilidad de ampliar el espacio físico pero sobre todo de emplear más jóvenes de manera continua.

“Eso es el objetivo de la institución. Para nosotros es una apuesta muy fuerte porque queremos que los chicos salgan del curso y puedan formar parte de una empresa social, darles una permanencia y estabilidad. Queremos llegar a tener al menos diez pibes laburando”, remarcó Horacio Garbulla, coordinador general del CCB.

Por su parte, Lugo precisó que “la idea es acaparar todo el reciclado de residuos informáticos domiciliarios que recolecta la Municipalidad y que todos esos beneficios queden acá”.

Además, planean ofrecer el mismo servicio a gran escala, para empresas y comercios, y contar con una molienda propia que les permita no tener que tercerizar parte del proceso de reciclado.

“Los chicos han descubierto capacidades y virtudes que no pueden quedar sin explotar. Desde acá hacemos todo para que no se alejen. Por eso, en el mientras tanto, buscamos llevar la mayor cantidad de potenciales emprendedores al programa Rosario Emprende y acompañarlos en ese proceso”, cuenta Garbulla.

El desarrollo del programa de reciclaje de Raee es sólo una de las aristas en las que se trabaja en el CCB de Molino Blanco desde el 2014. Allí también se dictan capacitaciones en panadería y panificación, carpintería, electricidad domiciliaria, además de las de reciclaje y operador de PC. “Además, hay talleres de graffiti y pintura, ajedrez, artes urbanas (circo) y clases de gimnasia”, enumera Garbulla.

Y agregó: “Estamos muy bien y tanto los talleres como las capacitaciones están al ciento por ciento. Cada capacitación tiene alrededor de 15, 16 personas”.

En este marco, el coordinador general del CCB señaló: “Todos funcionan en el marco del programa provincial Nueva Oportunidad para que los chicos reciban una beca y trabajamos con la Secretaría de Economía Social para lograr la inserción laboral después de la formación. Los cursos relacionados a la informática son los que más marcan la identidad del espacio. Ahí los chicos tienen el incentivo de que durante el taller se arman su propia computadora”.

Finalmente, Garbulla remarcó: “El desafío es importante, nosotros queremos que crezca. Que este sea para el barrio el lugar donde estén los pibes”. Una definición conceptual de cara a un futuro complejo.

War on waste: Why we should recycle our old mobile phones

Got a drawer at home that is storing a few of your old mobile phones?

You're not alone.

There are more than 23 million unused phones in Australia according to industry-funded recycler MobileMuster, and they represent a large amount of natural resources that could be recycled.

In fact, each unused phone presents 23 million opportunities to reuse valuable metals, University of Adelaide professor Derek Abbott said.

"As we get more and more advanced devices, there are more unusual elements being used," he said.

"The most advanced Intel microchips use an element in them called hafnium, which is a rare element."

MobileMuster estimates 62 per cent of Australians keep their mobile phones for two years.

One in six reuse or re-gift their phone; of the remainder, only 12 per cent decide to recycle it.

"It's been estimated that if I were to randomly grab one million mobile phones and extract all the gold out of them, there would be over 30 kilograms of gold in there," Professor Abbott said.

In the same amount of phones, Professor Abbott said, there would be more than 300 kilograms of silver.

"The copper would be over 10 tonnes."

Professor Abbott said although the amounts of recoverable per device was small, the overall material available to be recycled from unused phones was massive.

"There are many rare elements in there, and these resources do get stretched.

"It's probably getting to a point where it is cheaper to recycle than it is to dig up more ore and search for this stuff.

"If you had a tonne of old iPhones, the density of gold in there, although it is tiny, is actually 300 times more than in the same tonnage of gold ore.

"Mining old phones, in theory, should be cheaper than going out and mining the ore to start with."

MobileMuster is a free mobile phone recycling service, with donation points throughout Australia and prepaid envelopes available from most post offices.

Australians update their mobile phones every two years on average.


Gold processing bacteria help to recycle electronics

Adelaide - There are species of bacteria that efficient at processing of gold ore. Applications include recycling electronics as well as use in exploration for new deposits. A new study demonstrates the advantages.

The study has been undertaken at the University of Adelaide and it has been running for ten years. The focus is with how gold can be dissolved, dispersed and re-concentrated into nuggets by the activities of microorganisms; a process called biogeochemical processing.

One area of interest is how long the cycle takes to complete and whether the process can be optimized, including speeding up the conversion process. This is with a view to industrializing the microbial activity on a larger scale.

The process is described by Dr Frank Reith in a research brief: "In the natural environment, primary gold makes its way into soils, sediments and waterways through biogeochemical weathering and eventually ends up in the ocean."

With the role of microbes, he adds: "On the way bacteria can dissolve and re-concentrate gold - this process removes most of the silver and forms gold nuggets."

The bacterium that undertakes the process most efficiently is calledDelftia acidovorans. The organism has a King Midas-like touch, and this is a natural part of the organism's self-defense mechanism. Dissolved gold is toxic to the organism, so it has evolved a mechanism to turn poisonous ions into harmless gold particles that eventually accumulate outside of the bacterial cell. A second bacterium species called Cupriavidus metallidurans can also produce gold nuggets.

What the researchers hope is to find an economically viable way of performing gold extraction from ore and re-processing old tailings or recycled electronics. At present this process is costly, meaning that many electronic devices simply end up in landfill sites rather than being recycled for their potentially valuable competes.

The reason the process is costly is because it takes considerable amounts of time. This time is very short in geological terms, but it is too long for any person to make it commercially effective. Through the use of high-resolution electron-microscopy, the time taken for the microbial processing is anything between 3.5 and 11.7 years for each stage of the process, meaning that it could be up to 60 years before gold is completely recovered and processed.

However, new insights into the process mean that innovative processing techniques could be achieved and this represents the next phase of the continuing research project.

The research is published in the journalChemical Geology, under the heading "Secondary gold structures: Relics of past biogeochemical transformations and implications for colloidal gold dispersion in subtropical environments."