Gold prices are coming out of a volatile week for stocks with a slight gain as the dollar retreated, and more strength could be ahead with another volatile month in October.

One of the prime movers that could help the case of higher gold prices is inflation. Rising consumer prices have been rampant as the economy continues to recover from the effects of the ongoing pandemic.

“The dollar pulled back, making gold less expensive in other currencies, encouraging demand,” a CNBC report noted. “Gold was on track for its first weekly uptick since Sept. 3, rising about 0.5% so far, as a retreat in the dollar on Thursday (September 30) helped it bounce about 2%.”

A move towards global vaccination is helping to spur businesses back into action, causing the Federal Reserve to take notice via improving economic data. As such, the central bank is eyeing 2022 as the year to begin raising interest rates again after standing pat through the pandemic.

Gold’s strength is also being supported by economic data from around the world. The global appeal of the precious metal as a safe haven continues to get attention as rising inflation is affecting the European and Asian stock markets.

“Anyone trying to convince market participants that inflation is not here, that’s a fool’s game,” Saxo Bank analyst Ole Hansen said.

A Physical Gold ETF Option Worth Considering

phys ytd

Holding physical gold isn’t without its challenges. That’s one advantage of the Sprott Physical Gold Trust (PHYS), which comes with a 0.42% expense ratio.

PHYS invests and holds substantially all of its assets in physical gold bullion. PHYS seeks to provide a secure, convenient and exchange-traded investment alternative for investors who want to hold physical gold without the inconvenience that is typical of a direct investment in physical gold bullion.

“The Trusts’ precious metals are fully allocated which provides the Trusts with direct beneficial ownership,” Sprott mentioned on its website. “Unlike other bullion funds, the Trusts do not have an unallocated account that is used to facilitate transfers of bullion between financial institutions that act as authorized participants. Without exception, all of the bullion owned by the Trusts is held in the Trusts’ allocated accounts in physical form.”

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