Gold is Glittering: Should You Buy This ETF?

Gold is a traditional hedge that has its fair share of boosters and detractors. In recent years, some predicted that the cryptocurrency market had the potential to supplant gold and silver as the predominant alternative asset hedge. Recent history has thrown that supposition into serious question. Moreover, gold has gained ground since November.

The yellow metal surged to a record high in the opening months of the COVID-19 pandemic. Indeed, the health crisis proved to be destabilizing on a social, economic, and political level. However, central banks would spring into action with multi-trillion-dollar asset purchasing programs that brought equities back into vogue. This thrust gold out of favour.

In early November, the spot price of gold was hovering just above the US$1,600/ounce mark. Since then, it has enjoyed a huge upswing that has brought it back above the US$1,900/ounce price point.

Investors who want to track the spot price of gold bullion should consider the iShares Gold Bullion ETF (TSX:CGL). This exchange-traded fund (ETF) seeks to replicate the performance of the price of gold bullion, less fees and expenses. Shares of this ETF have climbed 4.4% year-over-year as of close on January 13. The ETF has shot up 12% over the past six months.

The United States Federal Reserve and the Bank of Canada both seem to be steadfast in their vows to avoid interest rate cuts in the months ahead. However, some experts are less sure. A move downward could mean even bigger things for the yellow metal. This ETF is worth holding in this uncertain environment.