3 Solid Precious Metals ETFs to Diversify Your Investments

Posted by on Nov 6th, 2023

Gold prices have surged over the past month due to the volatilities triggered by increased interest rates, soaring debt levels, and escalating geopolitical turmoil in the Middle East induced by the ongoing Israel-Hamas conflict. This situation has propelled a heightened demand for the precious metal as investors seek refuge in its value amid uncertainties.

Experts retain an optimistic stance on gold price prognosis, reflecting the traditional confidence in gold’s enduring stability and capacity to retain long-term value during financial uncertainty. Therefore, it could be wise to invest in solid precious metals ETFs SPDR Gold MiniShares (GLDM – Get Rating), iShares Gold Trust (IAU – Get Rating), and SPDR Gold Shares (GLD – Get Rating).

The gold price has risen about 8% since the end of September 2023 and recently surpassed the $2,000 per ounce mark for the second time this year.

The onset of the Israel-Hamas conflict heightened investor anxieties over its potential impacts. A pronounced escalation in gold demand, often touted as a ‘safe-haven’ asset, was observed.  World Bank analysts predict that this discord could further elevate the already high gold prices, projecting an average increase of 6% in 2024, amounting to $1,900 per ounce.

Investor anxieties extend beyond global conflicts, with fiscal uncertainty in the U.S. drawing increasing concern. With national debt reaching an unprecedented high of over $33 trillion, speculation over high-interest rates and more potential rate hikes to control inflation compounds these worries.

Historically, gold prices have declined due to rising interest rates as investors generally favor interest-bearing assets that can generate greater yields. Currently, however, with treasury yields rising due to fiscal unpredictability, investors are leaning toward the yellow metal. This choice is aided by the fact that gold, unlike stocks, corporate bonds, or government debt, holds no risk of default by its issuers.

Several investment banks retain a positive outlook for gold prices. JPMorgan Chase & Co. projects an escalation from $2,000 per ounce in 2023 to $2,175 per ounce next year. Similarly, Goldman Sachs carries a favorable forecast into the following year, predicting gold prices will reach up to $2,133 per ounce in 2024.

Considering these conducive trends, let’s take a look…

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