Given its year-to-date price increase at just over 11% for the year, a gift of gold could be the proverbial gift that keeps on giving if it continues its upward trajectory heading into the new year. Even at is current level, investors continue to purchase the precious metal.
Even with the stock and bond markets already pricing in rate cuts in 2024, the shift away from safe haven assets like the yellow metal and into riskier propositions isn’t quite happening. The metal propped up a shade over 2% within the past month. That’s despite news that the Federal Reserve is pivoting from its tight monetary policy in its latest rate pause.
“Investors are buying gold as there are fewer incentives for people to get rid of it, with the market betting the Federal Reserve will cut interest rates before they achieve their 2% inflation target, said Bart Melek, head of commodity strategies at TD Securities,” reported CNBC.
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.
Mining for Gold Opportunities
The yellow metal’s stocks, particularly those related to companies that focus on ancillary services like mining activities, can provide investors with an alternate play on the precious metal’s rising prices. Whether investors are interested in large-cap companies or the growth prospects of small caps, Sprott has two mining ETFs worth considering.
“Owning physical gold is expensive and complicated,” Forbes Advisor suggested. “So buying gold stocks is a great way for individual investors to get the exposure they need in their portfolios.”
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-capitalization precious metal companies.
For more news, information, and analysis, visit the Gold/Silver/Critical Materials Channel.