The threat of tariffs could be pushing more investors toward gold. President Trump’s recent tariffs on Canada and Mexico could spark additional demand for the precious metal.
With President Trump fresh off his inauguration, the tariff back-and-forth could just be in its early stages. Given the geopolitical risks, more investors have been looking in the direction of gold as an ideal safe haven asset. As such, gold has risen above $2,800 per ounce.
Feasibility & Flexibility
“There’s a lot of uncertainty out there right now and also wait-and-see attitude on the geopolitical stage with tariffs,” said Bob Haberkorn, senior market strategist at RJO Futures.
Investors looking to gain gold exposure but want to minimize the task of storing physical gold can opt for the Sprott Physical Gold Trust (PHYS ). In addition, PHYS allows investors to convert their fund shares into physical bullion. This offers investors the feasibility and flexibility when it comes to adding the precious metal to diversify a portfolio.
Consider a Mining Option
An optional method of getting gold exposure is via miners. As demand for gold rises, ancillary services that support the industry like mining can also exhibit bullishness. That said, investors can get mining exposure via the Sprott Gold Miners ETF (SGDM ).
Rather than choosing individual mining stocks, the fund adds broad-based exposure to miners. That eschews the overconcentration risk inherent in shares of single companies. PHYS offers a pure play. And 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. That provides added additional country diversification.
As shown in the chart below, both PHYS and SGDM have been mostly in lockstep with one another. The former was just slightly higher the past year. SGDM, however, has shown that it can make amplified price moves when gold trends higher. Investors will need to exercise due diligence and be aware of the increased volatility.
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.
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 LP or VettaFi.
Exchange Traded Funds (ETFs): SETM, LITP, URNM, URNJ, COPP, COPJ, NIKL, SGDM and SGDJ
