Current price – $230.4 Growth potential – 10-15%🔥 Investment time – 1 year
SPDR® Gold Shares ETF is the largest exchange-traded fund (ETF) that invests in gold. The fund's assets amount to $69 bln. SPDR® Gold Shares ETF provides a cost-effective way to invest in gold. Given the expected monetary policy easing by the Federal Reserve (Fed) and the European Central Bank (ECB), as well as geopolitical tensions, this precious metal is at historic highs and retains growth potential. The expected return on investment in SPDR® Gold Shares ETF is 10-15% over a 1-year horizon.
Investment thesis
🔼 Macroeconomic situation. The U.S. economy is showing signs of slowing. In this context, after a two-year cycle of raising the key interest rate, the U.S. Federal Reserve is expected to begin easing monetary policy. It is anticipated that in September, the key rate will be cut by at least 0.25 p.p., followed by several more rounds of cuts in 2024-2025. Fed easing generally leads to a weakening of the dollar, which is favorable for precious metal prices denominated in this currency.
🔼 Geopolitical risks. Ongoing conflicts in Ukraine and the Middle East keep investors on edge, as there are risks of further escalation. In this context, gold serves as a "safe-haven" asset.
🔼 Historical trends. September has historically been an unfavorable time for the stock market. Stocks and bonds tend to decline during this month, while gold usually performs well.
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Disclaimer
The information provided above is not an investment recommendation and does not guarantee or promise profitability. Before investing, you should assess the potential risks and rewards and determine your willingness and ability to accept such risks.
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