Investors who missed the 2024 gold rally haven’t been left in the dust. Investment banks are forecasting more bullish momentum for the precious metal amid market uncertainty.
Tariff fears, in particular, are helping to spark demand for the yellow metal. President Trump’s tariff wars could continue to feed into gold as a safe haven asset.
“However, if policy uncertainty — including tariff fears — stays high, higher speculative positioning for longer could push gold prices as high as $3,300 an ounce by year-end,” Goldman strategist Lina Thomas told clients, according to a Yahoo Finance report.
The prospect of interest cuts by the Federal Reserve should also help to lift the precious metal through 2025. If the economy starts to show signs of weakening, the Fed could resume its path to rate cuts, thereby pushing the dollar lower and for investors to use the metal as a hedge.
“A more forceful rally relative to our previous expectation is likely to be driven by deep-rooted bullish sentiment, with gold seen as a safe-haven asset amid a highly uncertain and volatile macro environment,” UBS said.
With momentum squarely behind gold, any price dips can give investors an opportunity to get exposure. With gold, investors can realize the benefits of portfolio diversification while hedging against market uncertainty with assets uncorrelated to the broader stock market.
2 Options for Gold Exposure
Sprott has a pair of options to consider when getting gold exposure. One way is via the Sprott Physical Gold Trust (PHYS). The other is a play on miners with the Sprott Gold Miners ETF (SGDM ).
PHYS offers easy access to pure-play gold exposure through its fund, but it also adds some degree of flexibility by allowing investors to convert their fund shares into physical bullion. With exposure to gold via funds, investors avoid the logistics of storing gold, but can always convert their shares to bullion if they want a more tangible investment feel.
Another option for exposure is via miners. As demand for the metal rises, supportive services in the gold industry like mining can also exhibit bullishness. Rather than choosing individual mining stocks, SGDM adds broad-based exposure to miners. That eschews the overconcentration risk inherent in shares of single companies.
SGDM 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.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
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.
Bullish refers to a positive outlook or sentiment towards a particular stock, sector, or the market as a whole, where prices are expected to rise.
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.
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, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
