$2,300 Gold Prices Could Help Boost the 'OUNZ' ETF

As Bitcoin rises and the U.S. dollar starts to show signs of weakness, gold is hanging back, watching it all unfold. If State Street analysis can hold up, $2,300 gold prices aren’t out of the question, which will boost the VanEck Merk Gold Trust (OUNZ).

“In a recent interview with Kitco News, George Milling-Stanley, chief gold strategist at State Street Global Advisors, said that he is not disappointed with gold’s recent price action as the precious metal saw its first negative start to the year since 2013,” a Kitco News report said. “He added that gold’s consolidation pattern is helping to remove some of the froth from the marketplace after gold prices pushed to record highs above $2,000 an ounce. He explained that last year gold prices rallied more than $500 an ounce to the new record, and it’s going to take some time for the market to adjust to a new price paradigm.”

As for the fund, OUNZ seeks to provide investors with an opportunity to invest in gold through the shares and delivery of physical gold in exchange for those shares. Summarily, OUNZ offers investors:

  • Deliverability: VanEck Merk Gold Trust holds gold bullion in the form of allocated London Bars. It differentiates itself by providing investors with the option to take physical delivery of gold bullion in exchange for their shares.
  • Convertibility: For the purpose of facilitating delivery, Merk has developed a proprietary process for the conversion of London Bars into gold coins and bars in denominations investors may desire.
  • Tax Efficiency: Taking delivery of gold is not a taxable event as investors merely take possession of what they already own, the gold.

OUNZ Chart

Covid Still a Factor for Investments in Gold

Covid uncertainty will help fuel demand for gold, even as a global vaccine continues to roll out.

“Milling-Stanley explained that as long as the U.S. and global economies continue to feel the devastating effects of the COVID-19 pandemic, central banks will be in no hurry to raise interest rates,” the Kitco report said. “Low to negative real yields will continue to support gold prices, he said.”

“Milling-Stanley said that he also expects geopolitical uncertainty to support safe-haven investor demand for gold along with the ongoing economic concerns,” the report added. “Although the U.S. has a new president, Milling-Stanley said he doesn’t expect to see a significant shift in American politics.”

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