The ongoing debasement trade and liquidity stress are two drivers for gold in 2026, according to a recent Sprott Precious Metals Report. For investors fearing they may have missed out on the gold rally, these drivers could prove otherwise.
Dubbed the “debasement trade” in 2025, investors were fleeing from fiat currencies and into hard assets like gold as market uncertainty persisted for much of the year. These same dynamics could carry over into this year, resulting in more tailwinds for gold.
“Until policymakers globally decide to address the rampant expansion of debt and deficits without resorting to financial repression policies, the debasement trade will likely remain a persistent feature, limiting the time and scope of corrections for gold and precious metals,” said Sprott market strategist Paul Wong in the report.
Additionally, Wong also highlighted of rising stress in short-term funding markets. This is especially the case when it comes to the “repo market” in which institutions raise short-term cash against Treasury collateral. In turn, this is forcing the Fed to rely on liquidity support, which creates an environment that may be conducive for gold strength.
“Gold thrives in times of fiscal dominance and liquidity expansion,” Wong added further, noting that “structural deficits, reserve scarcity and eroding confidence in fiat systems underpin demand for neutral reserve assets. Central banks are already replacing Treasuries with gold in their foreign exchange reserves, a trend likely to accelerate.”
Investors seeking gold exposure have various options to consider.
Two Golden Opportunities
A few of the opportunities Sprott offers for gold exposure include the Sprott Physical Gold Trust (PHYS ) and the Sprott Gold Miners ETF (SGDM ). PHYS offers pure-play gold exposure while SGDM takes an indirect route via gold miners.
PHYS gives investors gold exposure via trust units, but it also adds a layer of flexibility. PHYS allows investors the option to convert their units into physical bullion if they’re opting for a more tangible investment experience. Investing in PHYS avoids the logistical challenges that come with storing gold.
Gold miners offer an alternative pathway to exposure. SGDM invests in gold mining equities by tracking the Solactive Gold Miners Custom Factors Index. The index tracks the performance of larger‑sized gold mining companies listed on Canadian and major U.S. exchanges. The fund primarily targets large-cap gold mining companies that may be poised to benefit when gold prices rise. Supportive services like mining have tended to move higher whenever gold prices strengthen. Additionally, by investing in a sector ETF focused on gold mining, investors may mitigate the overconcentration risk associated with investing in shares of single companies and could benefit from tax efficiency, relatively lower costs, and trading flexibility of ETFs.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Content Hub.
The Sprott Physical Gold Trust is generally exposed to multiple risks that have been both identified and described in the Prospectus. Please refer to the Prospectus for a description of these risks. This material must be preceded or accompanied by a prospectus. For an additional copy of the prospectus please visit https://sprott.com/investment-strategies/physical-bullion-trusts/gold/.
An investor should consider the investment objectives, risks, charges, and expenses carefully before investing. To obtain a Prospectus, which contains this and other information, contact your financial professional or call 888.622.1813. Read the Prospectus carefully before investing, which can also be found by clicking one of the links below.
Past performance is no guarantee of future results. One cannot invest directly in an index.
Funds that emphasize investments in small/mid-cap companies will generally experience greater price volatility. Diversification does not eliminate the risk of investment losses. ETFs are considered to have continuous liquidity because they allow an individual to trade throughout the day. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses, affect the Fund’s performance.
Sprott Asset Management USA, Inc. is the Investment Adviser to the ETFs. ALPS Distributors, Inc. is the Distributor for the ETFs and is a registered broker-dealer and FINRA Member. ALPS Distributors, Inc. is not affiliated with Sprott Asset Management USA, Inc. or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM, SGDJ, SLVR, GBUG, METL
Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP.
Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.
