Global Uncertainties Push Gold to New Record Highs

The combination of tensions in certain parts of the globe along with a forthcoming U.S. election is pushing investors into the yellow metal as a safe haven asset. It’s already outpacing the S&P 500’s 23% YTD gain, and more upside could be ahead.

“This month’s rally is more driven by safe-haven¹ demand because of geopolitical tension in the Middle East and uncertainty around the U.S. election because its outcome is looking very tight, anyone can win,” said Soni Kumari, a commodity strategist at ANZ.

“The simple bottom line is that gold thrives on uncertainty,” said Rhona O’Connell, head of market analysis for EMEA and Asia at StoneX. “The lack of clarity over the medium-term direction of US foreign policy is adding to nervousness.”

For simplified gold exposure versus gold bullion itself, consider using the Sprott Physical Gold Trust (PHYS B+). The fund allows gold exposure without the logistical requirements of storing the precious metal. Furthermore, for those who want a more tangible investment experience, PHYS allows investors to convert their fund shares into physical bullion. This offers feasibility and flexibility when it comes to adding the precious metal to diversify a portfolio.

For a backdoor play on gold’s upside, miners can offer this level of exposure. More specifically, investors can look to the Sprott Gold Miners ETF (SGDM B-) to avoid overconcentration in one or more gold mining stocks. PHYS offers a pure play, while SGDM offers indirect exposure when comparing the two funds.

Alternatively, SGDM can build off demand for the yellow metal with its exposure to miners. The fund seeks investment results that correspond generally to the performance of the Solactive Gold Miners Custom Factors Index. This index tracks the performance of large-cap gold companies that trade on Canadian and U.S. exchanges, providing added country diversification.

For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.

¹ 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 assets classes, any asset may lose value, which may involve the complete loss of invested principal.

Past performance is no guarantee of future results.  One cannot invest directly in an index.  For the latest standardized performance and important risk disclosures regarding Sprott investment products, including each fund’s prospectus, which should be read carefully before investing, please review each product’s webpage by clicking on the corresponding ticker:

Exchange Traded Funds (ETFs):  SETM, LITP, URNMURNJ, COPP, COPJ, NIKL, SGDM and SGDJ

Physical Bullion:  PHYS, PSLV, CEF and SPPP

Physical Commodity:  U.UN COP.UN

Public Equity:  SGDLX and FUND