Precious metals have softened since March due to rising interest rates and a strong greenback, which have outweighed inflation. Although the market is expected to face some headwinds in the near term, the ongoing geopolitical crisis in eastern Europe and inflation remaining persistently high might bolster the market.
Despite being weighed down by soft demand, gold has shown resilience on the backs of robust Central Bank purchases. Gold prices are expected to end the year at around $1,800 an ounce. Carsten Fritsch, the precious metals analyst at Commerzbank, believes that the ending of the Fed’s rate hike cycle could boost the yellow metal.
Hence, the gold funds, Pacer iPath Gold Trendpilot ETNs (PBUG) and FT Cboe Vest Gold Tactical Buffer ETF (BGLD), might be solid buys.
Therefore, we think the silver ETF iShares Silver Trust (SLV) might be best avoided now.
Funds to Buy:
Pacer iPath Gold Trendpilot ETNs (PBUG)
PBUG is designed to provide exposure to the Pacer Barclays Gold Trendpilot Total Return Index. The Index is calculated on a total return basis and is intended to reflect the performance over time by taking 100%, 50%, or 0% notional exposure to the Barclays Gold 3-Month Deferred Index Excess Return and the return that corresponds to the weekly announced interest rate for specified 3-month U.S. Treasury bills.
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Over the past year, the fund’s net flows came in at $24.53 thousand. The fund has an expense ratio of 0.65% as compared to the category average of 0.46%. As of August 22, PBUG has a market capitalization of $22.29 million and a closing indicative note value of $22.16.
Over the past month, PBUG has gained 81.4% to close its last trading session at $56.25.
This promising prospect is reflected in PBUG’s POWR Ratings. The fund has an overall B rating, equating to a Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
PBUG has an A grade for Trade and Peer. In the 38-ETF Precious Metals ETFs group, it is ranked #1. Click here to see the additional POWR Rating for Buy & Hold for PBUG.
FT Cboe Vest Gold Tactical Buffer ETF (BGLD)
BGLD invests almost all of its assets in U.S. Treasury securities and shares of a wholly-owned subsidiary that holds FLEX Options that reference the price performance of the SPDR Gold Trust.
As of August 19, BGLD’s top holdings are U.S. Treasury Bill, 0%, due 08/25/2022, with a 98.57% weight, and 2022-08-31 SPDR Gold Trust C 162.58 with a 1.00% weight. As of August 22, BGLD has a $17.67 NAV and $17.67 million in total net assets. The fund has an expense ratio of 0.90%. Its one-year net flows came in at $10.27 million, and three-month net flows stood at $4.45 million.
The fund has declined 1% over the past month to close its last trading session at…
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