There are less than a week left until the beginning of 2024, and many investors and advisors are reevaluating their allocations and plans for the new year. A lot of different asset classes are currently being discussed as possible places to invest in 2024, but one that hasn’t garnered much attention is gold.
Gold has long been considered a safe haven asset that investors turn to during economic and geopolitical uncertainty. With both still surrounding the markets heading into the new year, and experts continuously calling for the precious metal to reach all-time highs, it may begin to be a place investors will turn their attention to in early 2024.
What Are Experts Saying About Gold?
For most of the fourth quarter, physical gold has been in rally mode after a sharp decline in late September. The recent price rally, coupled with market uncertainty, has led many experts to expect the rally to continue into the new year.
A recent article published by Barron’s supports this point. Reporter Yusuf Khan notes ANZ recently said, “Gold is likely to maintain its current rally in 2024, with a softening economy, falling interest rates and strong central bank demand likely to provide support.”
In addition, in the report, Khan shared that, “ANZ upped its 12-month price target to $2,200 a troy ounce, from $2,150 an ounce.” Those price targets would put the precious metal at some of the highest levels the precious metals has seen.
Where Can Advisors Look to Get Gold Exposure in 2024?
Advisors looking for direct exposure to the price of the precious metal can look to the Sprott Physical Gold Trust (PHYS). The trust is nearly 24 years old and currently has more than $5.7 billion in assets under management, according to VettaFi’s LOGICLY.
ETFs that hold gold mining companies are another possible route for investors who may be looking for indirect exposure to the metal’s performance in 2024. Although these types of ETFs come with equity risk, they may appeal to investors who believe that gold’s solid performance will also benefit the companies that mine for it.
SGDM has more than $212 million in AUM and an expense ratio of 0.50%. The nearly decade-old fund tracks the Sprott Zacks Gold Miners Index, which gives investors exposure to large gold companies. SGDJ, on the other hand, has close to $100 million in AUM and the same expense ratio as SGDM. Its underlying index, the Sprott Zacks Junior Gold Miners Index, offers exposure to small-cap gold companies.
The funds differ from one another in terms of their country exposures. SGDM has more than 80% of its holdings in Canada, with the rest invested in the U.S. and, to a lesser degree, South African stock. SGDJ offers exposure to five countries, including Australia, Canada, the U.K., the U.S. and Indonesia.
In terms of performance in 2023, PHYS has posted a 10% quarter-to-date return, close to a 12% return YTD, and a nearly 15% return in the last year, according to VettaFi’s LOGICLY.
So far in the fourth quarter, SGDM has returned nearly 11%. However, over the past 12 months, it is up over 6%. SGDJ has a quarter-to-date return of 17.66%, the best among the three funds discussed in this article, and is up 11% over the past 12 months.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.