Global Palladium Fund: Optimism about price of gold and silver

February 10, 2021

• Sustained tension between the US and China, geopolitical risks and a growing threat of inflation will ensure gold and silver remain attractive to investors
• Majority of investors believe the growing trend for countries to use alternatives to the US Dollar to settle international transactions will see the importance of gold increase

New research ⁽¹⁾ with institutional investors and wealth managers reveals the vast majority are optimistic about the price of gold and silver rising in 2021.

The study, from Global Palladium Fund (GPF), which recently listed four physically-backed metal Exchange Traded Commodities (ETCs) - including spot price of gold and silver ETCs -   with the lowest charges in Europe, reveals that one in three (32%) professional investors expect the price of gold to rise by between 3% and 5% this year, and the same number expect it to increase by between 5% and 10%.  Some 17% anticipate a rise of over 10%, and just 5% think the price of gold will fall.

The corresponding figures for the anticipated change in the price of silver this year are 25%, 25% and 8% respectively, but 16% of professional investors believe the precious metal’s value will fall.  Much of this be off the back of a gold rally, but also from rising industrial demand for the metal. 

The survey reveals that one of the main reasons why the price of gold is set to rise is that the US/China relationship is expected to remain challenging under the Biden administration, and this, along with several geopolitical risks and a growing threat of inflation, means 85% of institutional investors believe this will put upward pressure on the price of gold.

In addition to this, 40% of institutional investors strongly agree and 57% agree with the view that the importance of gold could increase as some countries look for alternative ways to the US Dollar to settle international trade.  Gold could increasingly fulfil this role as it is seen by many as ‘apolitical’ money as it is not issued by any central bank.  This too could have a positive impact on the price of gold.

Alexander Stoyanov, Chief Executive Officer of GPF said: “Our research reveals that many institutional investors and wealth managers have a positive outlook on both gold and silver this year.  There is still much uncertainty in the world, and this leads to increased market volatility, which can make precious metals more appealing to investors as they look to diversify their portfolios.”

NTree International Ltd, a specialist in marketing, distribution and investor engagement, is leading the distribution and rollout of the products.  NTree has set up a dedicated brand, Metal.Digital https://metal.digital as an education resource for professional investors with a focus on metals.

Timothy Harvey, Chief Executive Officer and Founder of NTree, said: “Over $50 billion of new funds was allocated to precious metals ETPs last year, which was more than double than in 2019.  Our research shows many investors are optimistic about the price of gold and silver this year, so it is a very opportune time to launch new metal ETCs that have the lowest charges in the marketplace, a firm commitment to ensuring the metals are mined ethically, and the highest possible standards when it comes to security and transparency.”

Global Palladium Fund’s (GPF) new ETCs are listed on the Deutsche Börse and London Stock Exchange and have the lowest charges with total expense ratios (TER) ranging from 0.145% to 0.20%. Targeting Family Offices, wealth managers, institutional and other professional investors, the new physically-backed gold, silver, platinum and palladium ETCs will track the spot price of the respective metals they cover. 

The ETCs have a strong focus on ESG. LBMA-approved metal will be sourced from producers and suppliers who support the Sustainable Development Goals of the UN 2030 Agenda and other global initiatives in sustainable development and responsible mining.

GPF is also the first to use Blockchain technology to record bar information into Distributed Ledger Technology, thereby providing an extra layer of security and proof of ownership to the Issuer.  The use of Blockchain is in addition to the traditional recording processes used by the custodian.