Precious Metals Index Hints at Bullishness Despite Hawkish Fed

June’s Fed pause could make way for more rate hikes, but potentially at a lesser pace. Despite that, a precious metals index is showing signs of bullishness despite prolonged sideways movement.

“The Global Precious Metals MMI (Monthly Metals Index) traded sideways month-on-month,” an Oil Price article said. “Overall, the index fell 2.75% as numerous components lost upward price momentum. All parts of the index moved sideways or fell slightly, except for Indian silver ingots and U.S. gold bullions.”

The Fed continues to move the needle when it comes to precious metals exposure. The notion is that a deceleration of rate hikes could put downward pressure on precious metals as investors move away from safe haven assets, but inflation still remains relatively high.

“Though Fed’s hawkishness has managed to impact precious metal prices in the U.S, prices still maintain some long-term bullish sentiment thanks to high inflation,” the article added further. “That said, inflation also appears to be slowing down.”

3 Flavors for Precious Metals Exposure

Gold exposure is a go-to choice in precious metals, and one exchange traded fund (ETF) for consideration is the Sprott Physical Gold Trust (PHYS). While other ETFs may hold futures contracts that follow the price of gold, PHYS offers a dynamic investment alternative for investors who want to hold physical gold sans the inconvenience that is typical of a direct investment in physical gold bullion.

That same structure can be had for silver exposure via the Sprott Physical Silver Trust (PSLV). PSLV is a closed-end trust. It holds unencumbered, fully allocated London Good Delivery bars of silver bullion that are stored in the custody of the Royal Canadian Mint.

For platinum and palladium exposure, consider the Sprott Physical Platinum and Palladium Trust (SPPP). SPPP provides a secure, convenient, and exchange traded investment alternative for investors who want to hold physical platinum and palladium.

In all three funds, shareholders have the ability to redeem their shares for physical bullion anywhere in the world (subject to certain minimum conditions). Redemption requests do not dilute the trust’s exposure for remaining shareholders.

For more news, information, and analysis, visit the Gold & Silver Investing Channel.