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Gold's Rally Continues to Tee Up Opportunities for Miners

BY | ETF Database
03/31/2025 | 79 VIEWS
The macro and microeconomic landscape could favor gold miners. Their performance has yet to catch up with gold prices. But the precious metal’s rally may be teeing up opportunities for investors to get gold mining exposure.“I think that we’re at a point right now where the miners have really underperformed the gold price over the past five years or so,” said Chris Mancini, associate portfolio manager at the Gabelli Gold Fund. “And they’re generating lots of free cash flow. So I think that even if the gold price stays here, the miners [may experience a] good run.” As mentioned, a potential driver for miners may be the ongoing rally for gold prices. Right now, a heavy dose of uncertainty is fueling gold prices. That’s because high inflation and geopolitical concerns remain on investors’ minds. Econofact highlighted the role of gold during times of economic uncertainty in a chart captured below. When times of economic uncertainty rise, so has the price of gold. This gets reflected in times of high inflation. But it also occurs when an unforeseen market disruptor can occur, such as in 2020, with the pandemic. “A good example is the 22 percent jump in gold prices during the first six months of the COVID pandemic,” Econofact noted. Econofact added that inflation at the time “remained below 1.5 [percent. But] there was a major loss of economic confidence and an associated drop in equity prices.”1 ETF for Broad Mining ExposureGiven the prospects of rising gold prices, investors may want to consider adding exposure to miners. Investors can build their own portfolio of gold miners. But an easier option would be to consider the Sprott Gold Miners ETF (SGDM B-). 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.Potential BullishnessWhen demand for gold rises, ancillary services in the gold industry like mining can also exhibit bullishness. SGDM’s focus on large-cap companies also means they have tended to be less sensitive to volatility that can come with small-cap companies. Furthermore, by concentrating exposure to a fund rather than building a portfolio of individual companies, investors may mitigate overconcentration risk.A bullish market is one in which prices are expected to rise. For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel. Disclosure Information 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. Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal. A “bull” market is one in which prices are rising. 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 USA, Inc. or VettaFi. Exchange Traded Funds (ETFs): SETM, LITP, URNM, URN, COPP, COPJ, NIKL, SGDM SGDJ Physical Bullion Funds: PHYS, PSLV, CEF, and SPPP

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