gold prices have been making gains lately, which could pave the way for a comeback. The precious metal has been stifled by rising interest rates fueling a strong dollar heading into the second half of 2022.
“Gold headed for its first weekly gain in six on Friday (July 22) as a pullback in U.S. Treasury yields and a weaker dollar boosted the appeal of non-performing bullion amid lingering economic risks. “, according to a CNBC report.
As gold prices have fallen in recent weeks, this gives investors the opportunity to recoup a store of value at lower prices. If a recession is imminent, look for safe-haven assets like gold to help shore up a portfolio or simply to add a touch of diversification into alternative assets that aren’t correlated to stock or bond markets.
Get exposure to gold via a physically backed ETF
Although investing in physical gold has tangible benefits, there can be storage issues for safekeeping purposes. An investor who is more inclined to take a hands-off approach will want something that offers exposure without the hassle of storage, and this is where exchange-traded funds (ETFs) could be advantageous.
An ETF to consider that mimics gold prices but does not require the additional task of storage is the abrdn Physical Gold Shares ETF (SGOL), which seeks to reflect the price performance of gold bullion. Fund overview according to SGOL’s fact sheet:
- Physical Safeguard: The Trust holds allocated physical gold bullion stored in secure vaults.
- Transparency: Metal is kept in allocated bars and a list of bars is published daily at abrdn.com/usa/etf.
- Pricing: The price of the metal is based on the London Bullion Market Association specifications for good delivery, which is an internationally recognized and transparent benchmark for the pricing of physical gold.
- Vault location: Metal is stored in Zurich, Switzerland and London, UK in a secure vault.
- Vault Inspection: Inspectorate International, one of the leading physical commodity auditors, inspects the vault twice a year (including once at random).
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