Gold’s rally appears to be extending itself into the current week’s trading session, as the precious metal pushed past the $1,800 price mark again.
A confluence of events are causing investors to once again head back into gold, namely the Delta variant of COVID-19, along with a weaker dollar.
“Gold prices rose above $1,800 per ounce on Monday after the US dollar retreated from multi-month highs, while investor concerns that the Delta coronavirus variant could dampen the pace of global economic recovery also lifted bullion’s safe-haven appeal,” a MINING.com article explained.
“The Delta variant is throwing sort of a spanner into the works on how likely and how soon we could see a tapering announcement,” ING analyst Warren Patterson told Reuters.
An additional factor is the Federal Reserve and its pledge to begin tapering bond purchases. Furthermore, tapering on stimulus dollars pumping into the economy is also up for debate amongst the Fed, particularly if the Delta variant slows down economic growth prospects.
Either way, this will all inter-play with the dollar, which could then further affect gold price volatility.
“I don’t think (Federal Reserve chairman Jerome) Powell will give a clear timeline for stimulus withdrawals. So the dollar will fall and gold could rise beyond $1,800,” predicted Jigar Trivedi, commodities analyst at Mumbai-based broker Anand Rathi Shares.
A Physical Gold Fund
Investors looking for options in gold can look at an ETF like the Sprott Physical Gold Trust PHYS. The fund comes with an expense ratio of 0.42%.
PHYS primarily invests in physical gold bullion in London Good Delivery bar form. The Sprott Physical Gold Trust was formed on August 28, 2009 and is domiciled in Canada.
“The Trusts’ precious metals are fully allocated which provides the Trusts with direct beneficial ownership,” Sprott mentioned on its website. “Unlike other bullion funds, the Trusts do not have an unallocated account that is used to facilitate transfers of bullion between financial institutions that act as authorized participants. Without exception, all of the bullion owned by the Trusts is held in the Trusts’ allocated accounts in physical form.”
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