The iShares S&P TSX Global Gold Index Fund (TSX:XGD) saw a 2.20% gain on Wednesday, closing at $12.10.
The ETF saw a steady increase after minutes from the Federal Reserve in which they unanimously agreed to hold rates steady. Gold and silver responded, finishing the day trading over 0.50% respectively. The Fed statement said that it would begin to commence the normalization of its balance sheet in the near future.
On July 24, the International Monetary Fund downgraded its growth forecast for the United States. The report revised U.S. growth from 2.3% to 2.1%. The U.S. stock market has experienced incredible gains after the election of Donald Trump in 2016. The promise of his pro-growth policies has made investors giddy, but recent events have thrown the administration into turmoil.
Healthcare reform is facing opposition within the Republican party, the passing of which has been laid as a pretense for Trump’s tax reform.
The U.S. dollar has been in a swoon since January, and the European, Australian, and Canadian currencies have been the beneficiary. Gold and silver have recovered some of the major losses incurred in the latter half of 2016 but volatility remains.
Gold and silver are well-positioned to capitalize if U.S. policy and growth forecasts continue to darken. This ETF has seen a 6% decline since late January and is a great value for those betting on gold and silver shining again in the future.
