Technical Analytics and Fundamentals Look Bullish for Gold

Diligent investors who seek technical and fundamental confirmation prior to allocating capital to a particular investment may want to give gold a closer look.

The yellow metal prices may be flashing bullish signals from a technical standpoint. That should appease short-term traders looking to profit from fluctuating prices. Additionally, the metal may also be presenting a buying opportunity for long-term investors, given its strong fundamentals in the current macroeconomic environment.

“To a large extent, fundamentals are in the eye of the beholder, whose opinions in any situation can vary from positive to negative and everything in between,” a Schiff Gold analysis said. “But even for the economic optimists, there are gathering clouds on the horizon likely to continue undermining the global economic outlook, the dollar, and all financial asset values. Fiat currencies are being downgraded relative to real money, which is gold.”

Geopolitical factors stemming from the conflict in the Middle East have been spurring a move to safe haven assets like the yellow metal. That should pair well with technical indicators and, once again, give the precious metal upward price momentum from a fundamental standpoint.

“Despite the backward-looking nature of technical analysis, the bullish argument is compelling, particularly in the context of heightened tensions in the Middle East and a looming global recession,” the analysis said further.

A Trio of Gold Exposure Options

For exposure to rising gold prices, investors can consider allocating to the Sprott Physical Gold Trust (PHYS). The fund provides an enhanced physical bullion structure that offers the ease of purchase and sale that comes with being traded on a stock market exchange. Additionally, shares are redeemable for the precious metal bullion if investors want the feel of a more tangible investment.

For an alternate play on the metal’s rising prices, ancillary services like mining present another investment opportunity. Rather than opt for single-stock exposure, an all-encompassing approach is available in the Sprott Gold Miners ETF (SGDM). The fund seeks investment results that correspond generally to the performance of the Solactive Gold Miners Custom Factors Index, which tracks the performance of larger-sized mining companies on Canadian and major U.S. exchanges.

An alternative to SGDM is the more growth-oriented Sprott Junior Gold Miners ETF (SGDJ). That fund tracks the Solactive Junior Gold Miners Custom Factors Index, which follows the performance of small-cap miners.

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