For some time after hitting highs amid the COVID-19 pandemic, gold prices were relatively docile through the end of 2020. However, once inflation fears started creeping into 2021 amid a recovery, it set gold on a roller coaster ride through the first half of 2022.
Inflation figures continue to weigh heavy on the minds of investors, which is also spilling over into the gold market. Despite a bullish dollar amid rising interest rates, gold has been holding its own, rising as high as 13% in the beginning of March.
Since then, gold has fallen to just about 2% for its year-to-date gain, but if inflation continues to run hot, more investors could be seeking out the precious metal in a safe haven scramble. According to Standard Chartered analyst Suki Cooper, gold prices have been “remarkably resilient given (rate) hiking expectations, and a softening physical market.”
As such, gone are the days when gold was trading sideways. Now, investors could expect more market fluctuations as more unknowns enter into the second half of 2022.
“Gold has had a manic roller coaster ride, dropping to lows of the month before rallying sharply on the CPI report and bouncing back again on the worst consumer sentiment report on record,” said Tai Wong, an independent metals trader in New York.
SGOL: Transparent and Physically-Backed
Investors still looking to get gold exposure can use ETFs as a dynamic investment vehicle to add precious metals to a portfolio. The abrdn Physical Gold Shares ETF (SGOL), for example, seeks to reflect the performance of the price of gold bullion.
Fund facts: per SGOL’s fact sheet:
- Physically-backed: The trust holds allocated physical gold bullion bars stored in secure vaults.
- Transparency: The metal is held in allocated bars, and a bar list is posted daily on abrdn.com/usa/etf.
- Pricing: The metal is priced off the London Bullion Market Association’s specifications for Good Delivery, which is an internationally recognized and transparent benchmark for pricing physical gold.
- Vault location: Metal is held in Zurich, Switzerland and London, England in a secured vault.
- Vault inspection: Inspectorate International, a leading physical commodity auditor, inspects the
vault twice per year (including once at random).
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