A Golden Opportunity to Buy the Precious Metals Dip

Gold prices are up over 50% year-to-date, giving existing investors an opportunity to wind down their positions or, for bullish “diamond hand” investors, an opportunity to continue adding exposure. Market volatility prior to the Thanksgiving holiday also reminded investors that gold is an ideal option for safe haven seekers looking for precious metals exposure.

Forging ahead towards the end of the year, many of the fundamental drivers for gold still persist. The “debasement trade” continues to draw investors from fiat currencies and into hard assets like gold. Additionally, central bank buying should help keep prices afloat in the interim as prices consolidate.

“After years of declining reserve allocations, central banks have become persistent net buyers of gold, pushing the metal’s share of global reserves to recent highs,” wrote Paul Wong in a Sprott Precious Metals Report: The Debasement Trade Broadens Across Precious Metals.

“The relative scale and price insensitivity of central bank demand means that, over the long term, central banks are the primary anchor of gold’s secular price trend, while investment funds and speculative flows drive shorter-term volatility,” Wong added.

PHYS and SGDM present ETF opportunities for gold exposure, but they both carry their own unique paths. One offers pure-play gold exposure while the other takes an indirect route via gold miners.

PHYS offers easy gold exposure via fund shares, but it also adds a degree of flexibility. PHYS gives investors the option to convert their fund shares into physical bullion for a more tangible investment experience. This way, investors avoid the logistical challenges associated with storing gold.

As mentioned, miners offer another pathway to exposure. However, this pathway is via the investment of gold mining equities by tracking the Solactive Gold Miners Custom Factors Index. SGDM accomplishes  that by allocating investment capital to mostly large-cap gold mining companies poised to benefit when gold prices exhibit upside. As demand for gold increases, supportive services like mining can also move higher. That’s often the case after gold has already made a rally such as now. Furthermore, by investing in a sector ETF such as one focused on gold mining, investors will sidestep the overconcentration risk inherent in shares of single companies.

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

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.