As we head into the second half of the year, exchange traded fund investors should consider potential headwinds like the eventual Federal Reserve interest rate hike and think about how to prepare their portfolios accordingly.
On the upcoming webcast, June Update: Central Bank Separation Anxiety, Brian Novak, Senior Managing Director at Astor Investment Management, James Butterfill, Head of Research and Investment Strategy at ETF Securities, and Mike Cameron, Head of Institutional Sales at ETF Securities, will look at global central bank policies and how they affect the metals market.
“Fundamentals are supportive of precious metals amidst the current risk backdrop,” ETF Securities Executive Director Steven Dunn said in a note.
Related: Gold Demand is Robust
For example, fragile risk appetite may bolster the appeal of gold. Looking ahead, rising concerns over China’s debt problems and weaker earnings releases in the U.S. and Europe could support gold prices. Additionally, Dunn pointed out that long positions in gold continued to trend higher, rising 23% and supporting investors’ bullishness toward the precious metal.
Meanwhile, silver has shown some relative weakness compared to gold as the rising gold-to-silver ratio currently sits at 76. Nevertheless, investors are warming up to silver, with net long positioning expanded in silver to a record high of 80,275 contracts, according to Dunn.
[related_stories]Looking at the other white metals, platinum can find support from an expanding economy and rising auto sales. For example, auto registrations in Europe were up 9.1% in April, the strongest in eight years. Tighter emission standards in Europe will also bolster demand for Platinum as a diesel catalyst. Additionally, South African platinum miners could experience another wave of strikes and production outages when existing agreements expire in June.
Palladium has also enjoyed a decent bounce over the past month as short sellers covered positions. The precious metal may also regain momentum as it remains in a supply deficit for the firth consecutive year due to stronger demand from the auto industry.
Related: Soaring Gold, Silver, Platinum ETFs Power Up
Investors can gain exposure to these precious metals through a number of physically backed ETF options, including ETFS Physical Swiss Gold Shares (NYSEArca: SGOL), ETFS Physical Silver Shares (NYSEArca: SIVR), ETFS Physical Platinum Shares (NYSEArca: PPLT) and ETFS Physical Palladium Shares (NYSEArca: PALL). ETF investors can also use the ETFS Physical Precious Metals Basket Shares (NYSEArca: GLTR) as a catch-all of all four precious metals.
Financial advisors who are interested in learning more about investment themes for the rest of the year can register for the Thursday, June 9 webcast here.