The fourth quarter saw gold’s price increase more than 10% as it crossed the $2,000/oz threshold. It’s now hovering around $2,045/oz. Several strategists in the gold space expect the precious metal’s rally to continue in 2024. And some even believe it could outperform all other commodities this year.
“I still see gold heading higher versus all commodities,” Mike McGlone, senior macro strategist with Bloomberg Intelligence, said on The Tape Podcast.
In the podcast, he highlights that much of the upward trajectory of gold’s price is being driven by central banks purchasing the precious metal in large quantities. McGlone also highlights that he doesn’t expect this trend to stop in 2024. He names this as a major contributing factor to his expectations of gold having a positive performance in 2024.
See More: “Gold’s 2023 Performance and Looking Ahead to 2024“
In addition, a recent article from State Street Global Advisors reveals that a “Shifting monetary policy, an economic slowdown, and elevated volatility may create a positive environment for gold. Additionally, growing demand from fundamental factors exogenous to macroeconomic variables should continue to support gold.”
With experts and strategists giving several different reasons as to why they are expecting big things from gold this year, there could be quite a bit more runway ahead of the metal. Its recent performance aside, gold has typically been used as a store of value and for diversification purposes. Currently, investors and advisors have many ETF choices that can provide exposure to it.
An ETF Offering Direct Exposure to Gold
One of them is the VanEck Merk Gold Trust (OUNZ), and it is unique among the other physical gold ETFs currently trading. The nearly decade-old fund tracks the LBMA Gold Price PM Index, like many of the other gold ETFs. However, it is the only one to allow shareholders to exchange their shares for actual physical gold.
See More: “2 Gold Miner Funds to Consider for 2024“
OUNZ has an expense ratio of just 0.25%, making it a cheaper option than the much larger SPDR Gold Shares (GLD) fund. This expense ratio is also nearly 22 basis points cheaper than its ETF Database Category Average. The fund currently has $775.7 million in assets under management after gathering nearly $93 million in flows during 2023, according to VettaFi Pro.
OUNZ returned nearly 14% in 2023 and has an annualized five-year return of almost 10%.
Closing Thoughts
If central banks continue to support the price of gold through their purchases, and the economy begins to slow down, gold could continue its upward trend. And right now, gold appears to be well-positioned to do so and possibly outperform relative to other commodities.
OUNZ offers a low-cost way to gain exposure to gold, in addition to allowing investors the opportunity to exchange shares for actual gold.
For more news, information, and strategy, visit the Beyond Basic Beta Channel.
Originally published on ETFTrends.com on January 4, 2024.
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