As equities markets continue to recover from March’s sell-off, precious metals could benefit from the increased uncertainty of a post-coronavirus world. Right now, the two popular metals, gold, and silver are feeling the pressure of an equities recovery.
“From a technical view, gold is now at must-hold support; if the $1,650 level in the June futures fails, the trend will reverse from long to short,” wrote Kitco’s Todd Horwitz. “Silver has been weaker than gold but also finds itself at a must-hold level of $14.80 in the July futures. Silver finds itself at the bottom end of congestion, which should create a bounce and reverse the trend. However, we do not change until the technical levels confirm.”
The biggest surprise might be platinum, which has been building off its own strength lately with bullish price action.
“Platinum looks the best of the group although it is still in congestion,” Horwitz wrote. “Platinum is in a wide trading range of $750-$850 in the July futures and can go either way from here. Wherever the metals go from here, they are still in bullish formations, which has a chance to change by day’s end. We have been long and have large profits across the board. We don’t expect a change. We expect a bounce but are prepared to reverse if that’s what the market footprint tells us to do.”
Buying Into Precious Metals ETFs
Investors looking to get gold exposure can look at funds like SPDR Gold Shares (NYSEArca: GLD) and the SPDR Gold MiniShares (NYSEArca: GLDM). Precious metals like gold offer investors an alternative to diversify their holdings, and like other commodities, gold will march to the beat of its own drum compared to the broader market.
As opposed to actually purchasing physical platinum, investors can take advantage of platinum through exchange-traded funds (ETFs) like the Aberdeen Standard Platinum Shares ETF (NYSEArca: PPLT). PPLT seeks to reflect the performance of the price of physical platinum, less the expenses of the Trust’s operations, and is designed for investors who want a cost-effective and convenient way to invest in platinum with minimal credit risk.
ETF investors looking to get in on the silver action can look to funds like the iShares Silver Trust (SLV) and the Aberdeen Standard Physical Silver Shares ETF (SIVR), two of the largest ETFs backed by holdings of physical silver. For those looking for leverage, they can look to ETFs like the VelocityShares 3x Long Silver ETN Linked to the S&P GSCI Silver Index ER (NasdaqGM: USLV) and the ProShares Ultra Silver (NYSEArca: AGQ).
For more market trends, visit ETF Trends.