Gold and Other Precious Metals React to Dollar Dip | ETF Trends

Gold, silver, and other precious metals started Friday off hot as the U.S. dollar finally dipped in strength. Gold, silver, palladium, and copper futures all saw modest bumps.

The price boost is largely thought to be an effect of the European Central Bank implementing a 75-basis point interest rate hike. “Looking at the ECB’s’ comments yesterday, it seems that the European Central Bank (ECB) is prepared to raise interest rates by an additional 75 basis points (bps) the next month if it is determined that such a move is necessary,” said Naeem Aslam, chief market strategist at Avatrade.

Gold has had a disappointing summer. David Meger, director of metals trading at High Ridge Futures, noted, “Gold recently has acted as a risk asset rather than a safe-haven. The question is when will we see gold take on more of a safe-haven role as we begin to see economies slow due to these rising rate hike policies.”

According to Bloomberg, the dollar fell .9% after surging to record highs earlier this week. Spot gold is on course for a .9% increase, with silver, platinum, and palladium all seeing gains. This is the first-week gold has gained in four weeks.

If gold can continue to shed its recent “risk asset” behavior and regain its safe-haven groove, the yellow metal might see a resurgence, as global economic headwinds and persistent inflation play to gold’s strengths. David Jones, chief market strategist at, said, “the U.S. dollar index dropping back to a one-week low has boosted the price of gold, and there may well be further strength into the inflation report and perhaps even beyond that.”

Sprott has a suite of precious metal funds to help investors take advantage of the precious metals rebound. For gold, the Sprott Physical Gold Trust (PHYS) or the newly launched Sprott ESG Gold ETF (SESG), which sources gold from environmentally friendly mines, are both solid options. An equities play is possible through gold miners such as the Sprott Gold Miners ETF (SGDM) or the Sprott Junior Gold Miners ETF (SGDJ). Investors can get silver exposure through the Sprott Physical Silver Trust (PSLV) and tap platinum and palladium through the Sprott Physical Platinum and Palladium Trust (SPPP).

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