Precious Metal ETFs & Stock Sizzling This Valentine's Day
Precious metals have long been the idealValentine’s Day gift. This year, the very gift category should get more prominence as the growing coronavirus scare has rattled global markets and boosted a safe-haven rally.
People view precious metals as a sign of wealth. Investing in precious metals like gold ensures safety of your money by not being reliant on a bank or business performance.
This sense of safety or intrinsic value makes precious metals a good long-term investment choice. And this is why many global banks and governments hold a considerable percentage of their reserves in the form of gold bullion, according to analysts.
A decline in interest rates on global levels (and most importantly by the Fed which impacts the value of the U.S. dollar) is also lowering the cost of owning precious metal bullions, which are basically non-interest-bearing assets.
Against this backdrop, we talk about a few precious metal ETFs and a stock that could be good investment bets in the near term.
ETF Picks
SPDR Gold Trust ETF GLD
Gold is often viewed as a safe-haven asset offering protection against financial risks, and will likely perform well on heightened market volatility (read: Most Loved/Hated ETFs of the Fourth Quarter).
Gold has been pretty steady since mid-December with GLD gaining about 6.1% compared with a 6.9% jump in SPDR S&P 500 ETF SPY. With that being said, we would like to note that physical demand seems weak this year, with retail purchases in two key consuming countries, India and China, slowing down. Central banks’ buying spree is also moderating. So, the metal is majorly seeing safe-haven demand.
Aberdeen Standard Physical Palladium Shares ETF PALL
The palladium price rally seems to be knowing no bounds. After a surge in 2019, the palladium price momentum is showing no signs of a slowdown this year too. The rally has mainly been fueled by growing global demand and stagnating supply.
“There are few well-established palladium mines,” while demand has been rising on increased consumption of gasoline engines. Stringent emission control norms have been fueling demand for palladium-using petrol-fueled cars as governments around the world look to fight climate change.
Investors should also note that while palladium acts as an industrial metal and should have underperformed in the wake of a month-long coronavirus scare, it actually surged amid demand-supply imbalance. PALL added 12.5% in the past month compared with SPY’s 2.9% gain (read: Palladium ETF Continues to Surge in 2020: What Lies Ahead?).
Stock Pick
Signet Jewelers Limited SIG
This retailer of diamond jewelry, watches as well as other products has a Zacks Rank #1 (Strong Buy). The company operates in the United States, Canada, U.K., Puerto Rico, the Republic of Ireland, and the Channel Islands. The Retail – Jewelry belongs to a favorable Zacks industry (placed at the top 18% of 250+ industries).The stock has gained 27.5% in the past month.
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Signet Jewelers Limited (SIG) : Free Stock Analysis Report
SPDR Gold Shares (GLD): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
Aberdeen Standard Physical Palladium Shares ETF (PALL): ETF Research Reports
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