Precious metals continue to have an interesting summer. Inflation fears still stalk the market, but last month the U.S. dollar rebounded with more strength than anticipated. That usually spells big trouble for inflation hedges, like precious metals, but the metals complex remained resilient.
Gold ended the month at $1,846.70/oz, up 2% on the month. The modest increase came despite pressure from the Fed and the steadying U.S. dollar. Concerns about the delta variant, as well long-term strength in gold’s fundamentals, kept the yellow metal afloat.
However, in the short-term, the metal’s price could waver, as investors continue to suss out the state of the pandemic. But if a second lockdown looks likely, then inflation whispers will likely become screams—and gold could surge.
Even in the event that the world governments can successfully navigate this new phase of the pandemic, gold still has a further runway, given that its long-term fundamentals are looking bright as ever.
For investors looking to capitalize on higher gold prices, the Sprott Physical Gold Trust (PHYS) holds gold bullion. Sprott also offers two actively managed precious metals mining ETFs: the Sprott Gold Miners ETF (SGDM), which tracks gold majors, and the Sprott Junior Gold Miners ETF (SGDJ), which tracks junior gold miners.
By closing the month at $25.50/oz, silver managed to stay mostly flat as compared to the previous month. It started July at $26/oz.
Like gold, silver has incredible medium- and long-term potential, considering its use in environmentally-friendly technologies. With climate change happening on a faster, more destructive pace than initially anticipated, expect governments to start pushing for clean cars and clean energy – two technologies that lean heavy on silver.
Investors can access physical silver through the Sprott Physical Silver Trust (PSLV), which is a closed-end trust that holds LGD silver bars.
Platinum and Palladium
Arguably the two swingiest metals of the past few years, both platinum and palladium are no strangers to wild price swings. A quick look at July shows some modest growth, however.
Palladium is currently at $2,690.50/oz and platinum is at $1,053/oz, but there are signs that each metal could be entering a bullish surge. After a rough June, which saw platinum end at $1,048.44/oz and palladium limp into July at $2,517.18, both metals rallied in July off of reports of shortages near the end of the month.
In November of 2020, uranium prices were sitting at $20. Today, they are at $33.30, and have been surging since March.
Uranium is likely to attract lots of attention in the coming months, as the dire environmental situation continues to drive home the need for cleaner fuel sources. As governments pivot to solar and wind, they are going to need supplemental power to keep up with energy demands. Nuclear is the obvious choice as the energy economy pivots, with its low emissions rate and high power output.
This month Sprott created a new uranium fund that gives investors an opportunity to have exposure to this growing energy titan.
For more information, please visit the Gold & Silver Investing Channel.