The U.S. Dollar Index has been trending lower since late 2022, paving the way for a precious metals rally in 2023. The last few months in particular have seen strength in the World Bank’s precious metals index.
It’s not just a weakening dollar that’s translating to strength in precious metals, but a confluence of other factors.
“Precious metals have rallied in the last three months following a dip in prices at the beginning of 2023,” a World Bank blog noted. “The World Bank’s precious metals index increased by 9 percent in 2023Q1, driven by a weakening U.S. dollar, geopolitical tensions, inflationary pressures, and increasing economic uncertainty.”
While precious metals like gold can offer a store of value in times when safe havens are in demand amid economic uncertainty, industrial metals can offer more tangible value. Silver and platinum, for example, can offer a dual benefit of a store of value and industrial use.
“Strong industrial demand also played a significant role in lifting the price of silver and platinum,” the blog added. “Weakening global economic growth and market expectations of fewer interest rates hikes may lead to further prices rising, especially if central banks purchase more gold.”
3 Ways to Get Exposure
As opposed to purchasing precious metals directly, Sprott offers funds that can provide exposure to platinum, silver, and gold.
One fund to consider is the Sprott Physical Platinum and Palladium Trust SPPP. SPPP provides a secure, convenient, and exchange traded investment alternative for investors who want to hold physical platinum and palladium.
For silver specifically, consider the Sprott Physical Silver Trust (PSLV ). PSLV is a closed-end trust that holds unencumbered, fully allocated London Good Delivery bars of silver bullion. These bars are stored in the custody of the Royal Canadian Mint.
Lastly, gold exposure is available via the Sprott Physical Gold Trust PHYS. The fund provides an enhanced physical bullion structure. It also offers the ease of purchase and sale that comes with being traded on an exchange.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.