Gold Dips in the Short Term, But Still Appealing Long Term

Gold prices have been in lockstep with stock prices to start the new year, retreating from the highs of 2023. However, price dips in the precious metal offer investors an opportunity to take advantage, as gold still looks appealing in the long-term investment horizon.

Though gold has retreated lately, the precious metal is still up over 10% within the last year. Market uncertainty heading into a U.S. presidential election year should buoy gold’s appeal as a safe haven asset amid volatility, while the anticipation of rate cuts by the Fed should stifle a rally by the U.S. dollar. With these potential tailwinds behind gold to start the new year, the long-term prospects for more price increases in gold should appeal to investors. Additionally, its inclusion in a portfolio as a diversification tool is also worth considering for prospective investors.

“The broader appeal for the Gold price is upbeat as prospects of rate cuts from the Federal Reserve (Fed) have strengthened after the release of the Federal Open Market Committee (FOMC) minutes,” a FX Street article noted. “While uncertainty about when exactly the Fed will announce a rate cut decision could keep volatility in the Gold price high.”

Ways to Buy Gold Dips

In the meantime, price dips in the precious metal offer investors an opportunity to take advantage of the price cuts. Funds from Sprott allow investors to get exposure to gold prices while also offering backdoor options for exposure via miners.

Investors looking to gain exposure without having to purchase the precious metal bullion, but want to maintain the option to do so, may want to look at the Sprott Physical Gold Trust (PHYS). The fund provides an enhanced physical bullion structure, and offers the ease of purchase and sale that comes with being traded on a stock market exchange. Shares are redeemable for the precious metal bullion if the investor wants the feel of a more tangible investment.

For large-cap exposure, consider the Sprott Gold Miners ETF (SGDM). The ETF seeks investment results that correspond generally to the performance of the Solactive Gold Miners Custom Factors Index. This index tracks the performance of larger-sized mining companies on Canadian and major U.S. exchanges.

An alternative to SGDM is a focus on small-caps for more growth-oriented opportunities like the Sprott Junior Gold Miners ETF (SGDJ). The fund tracks the Solactive Junior Gold Miners Custom Factors Index, which follows the performance of the small-cap precious metal companies.

For more news, information, and analysis, visit the Gold/Silver/Critical Materials Channel.