Uncorrelated assets that are normally deemed safe havens during sharp market downturns, like precious metals for example, have been following the downward spiral in equities. The 10% drop in the Dow Jones Industrial Average was followed by weakness in precious metals in Thursday’s forgettable trading session.
Per a Kitco report, here’s how precious metals were faring on another tough day on Wall Street:
- Gold: down 4%
- Platinum: down 10%
- Palladium: down 19%
- Silver: down 6%
Nonetheless, certain analysts are still bullish on gold.
“We believe prices will likely continue to be caught in a tug of war between safe-haven flows and liquidity needs; but beyond the near term, an environment of record-low US Treasury yields, expectations of further Fed rate cuts, weak equity markets, dovish central bank action globally, and growing negative-yielding debt will likely continue to stoke demand for gold as a diversifier and a safe haven,” said Standard Chartered precious metals analysts Suki Cooper.
Buying the Dip in Precious Metals
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 who want to get in on the palladium action can look to the Aberdeen Standard Phys PalladiumShrs ETF (NYSEArca: PALL). PALL seeks to reflect the performance of the price of physical palladium, less the expenses of the Trust’s operations. The fund is designed for investors who want a cost-effective and convenient way to invest in palladium 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.