“There is increasing expectations for President Trump to counter react to the North Korean aggression, which may further propel the prices upwards,” Mihir Kapadia, CEO at Sun Global Investments, said in a note.
Potential investors interested in gold miners as a way to capture the current strength in the gold market have a number of options to choose from. For instance, GDX and RING provide traditional market-cap weighted exposure to global gold miners. Additionally, the recently launched GOAU implements an alternative smart-beta indexing methodology to the gold miner theme, which also puts an emphasis on steadier royalty companies.
Holmes said investors should know that royalty companies can help investors manage many common risks associated with traditional producers.
“Since they are not directly responsible for actually building and maintaining the mines themselves, or other costly infrastructure, massive operating expenses can be avoided,” he said. “Concentration risk is also mitigated because these royalty companies hold highly diversified portfolios of mines and other assets.”
For more information on gold producers, visit our gold miners category.