Should You Gun for Gold Today?

The spot price of gold was trading just above US$1,950 an ounce in after hours trading on Wednesday, May 31. Investors flocked to gold as the United States was locked in yet another negotiation regarding the debt ceiling. Fortunately, cooler heads prevailed and have seemingly put forth a deal that should kick the can down the road once more.

Investors should not let news of the debt ceiling agreement scare them away from the yellow metal. Indeed, low consumer confidence and continued global economic uncertainty has given gold a solid price floor. The top precious metal could climb higher in the late spring and summer of 2023 as North American and global markets are headed into another period of turbulence.

Readers who want to take a broad shot at the yellow metal might want to consider snatching up the iShares S&P Global Gold Index ETF (TSX:XGD). This exchange-traded fund (ETF) seeks to provide long-term capital growth by replicating the performance of the S&P/TSX Global Gold Index, net of expenses. Shares of this gold focused ETF have dropped 9% month-over-month as of close on Tuesday, May 30. That has pushed the ETF into negative territory so far in 2023.

Some of the top holdings in this fund include gold producing giants like Newmont, Barrick Gold, Franco Nevada Corp, Agnico Eagle Mines, and Kinross Gold. Investors should keep in mind that this is a high-risk fund due to its exposure to the historically volatile precious metals space.