Gold prices have been notching gains as of late, which could be setting the stage for a comeback. The precious metal has been stifled by rising interest rates that are feeding into a strong dollar heading into the second half of 2022.
“Gold headed for its first weekly gain in six on Friday (July 22) as a pullback in U.S. Treasury yields and the dollar’s decline bolstered non-yielding bullion’s safe-haven appeal as economic risks persisted,” a CNBC report said.
While gold prices have dipped in recent weeks, this gives investors an opportunity to scoop up a store of value at lower prices. If a recession is forthcoming, look to safe haven assets like gold to help shore up a portfolio or just to add a touch of diversification into alternative assets that are not correlated to the stock or bond markets.
Getting Gold Exposure Via a Physically Backed ETF
While investing in physical gold has its tangible benefits, there can be issues regarding storage for safekeeping purposes. An investor who is more inclined to take a hands-off approach will want something that provides exposure without the storage hassle, which is where exchange traded funds (ETFs) could be of benefit.
One ETF to consider that mimics gold prices but doesn’t require the additional task of storage is the abrdn Physical Gold Shares ETF (SGOL ), which seeks to reflect the performance of the price of gold bullion. Fund facts per SGOL’s fact sheet:
- Physically-backed: The trust holds allocated physical gold bullion bars stored in secure vaults.
- Transparency: The metal is held in allocated bars, and a bar list is posted daily on abrdn.com/usa/etf.
- Pricing: The metal is priced off the London Bullion Market Association’s specifications for Good Delivery, which is an internationally recognized and transparent benchmark for pricing physical gold.
- Vault location: Metal is held in Zurich, Switzerland, and London, U.K. in a secured vault.
- Vault inspection: Inspectorate International, a leading physical commodity auditor, inspects the vault twice per year (including once at random).
For more news, information, and strategy, visit the Commodities Channel.