The U.S. post-election rally is dissipating quickly, giving way to more upside for gold. In particular, increasing tensions between Russia and Ukraine is spurring a flight to safe haven assets and reinvigorating gold prices again.
Reuters noted gold’s recent rally, adding that investors “sought refuge in the safe-haven metal amid mounting geopolitical unease fueled by escalating Russia-Ukraine tensions.” The election of Donald Trump sparked an equities rally on the notion that tax cuts would favor corporations.
However, geopolitical tensions stifled the rally, leading global investment firms like Goldman Sachs to reiterate their bullishness in the precious metal. The firm is forecasting that gold can still hit $3,000 per ounce by the end of 2025, as central bank buying continues along with interest rate cuts.
The most recent post-election sell-off provided an ideal ingress to gold prices, Goldman Sachs noted. Prices are still up close to 30% year-to-date, outpacing the S&P 500.
With the recent flight to safe haven assets like gold, it also reaffirmed the fundamental benefits that gold exposure brings.
“Gold’s fundamentally supportive factors never went away,” said Charu Chanana, a strategist at Saxo Capital Markets.
2 Golden Opportunities
With bullish forecasts and a recent price dip, it’s an ideal time to get gold exposure. On that note, there are two options from Sprott worth considering — the Sprott Physical Gold Trust (PHYS) and the Sprott Gold Miners ETF (SGDM ). The former offers a pure gold play while the latter offers indirect exposure via gold miners.
When it comes to getting gold exposure, PHYS is for investors who want the more tangible gold investment experience. They hold the option of converting their PHYS shares into physical bullion. This offers feasibility and flexibility when diversifying a portfolio with gold. Investors can retain their shares of PHYS and still get gold exposure without the logistical challenges of storing the physical commodity.
On the other hand, SGDM can build off gold’s demand momentum 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 gold companies found on Canadian and major U.S. exchanges.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
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, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
Physical Bullion: PHYS, PSLV, CEF and SPPP
