Gold Continues To Hit Tops As Miners Have Started to Catch Up – These ETFs Offer Convenient Access

In the financial market, fear represents a powerful motivator – perhaps even the most powerful. That was one of the key messages that Sprott Inc SII Senior Managing Partner Ryan McIntyre shared with CNBC's Fast Money. As he put it, the retail investment community has a visceral reaction to wanting something physical and stable in the present chaotic environment, with gold potentially fitting the bill.

McIntyre underlined the primary concerns of investors: they want a safe haven¹ that's independent from other asset classes – and also independent from outside institutions. In this regard, physical gold distinguishes itself from competing investment categories as the precious metal doesn't depend on external frameworks to justify its intrinsic valuation, particularly under volatile environments.

Underlying the rally in gold is an inflationary catalyst. Since the U.S. went off the gold standard, the price of the metal has compounded at about 8% a year – with McIntyre anticipating that this trend will continue amid the relentless rise of the money supply. In fact, there's very little marginal addition of gold in actual physical circulation, creating a bullish² supply-demand dynamic.

All evidence points to sustained anxiety over economic instability as a key driver of gold prices. Last month, the Wall Street Journal reported that demand for gold is so strong that major banking institutions are buying bullion bars in London and flying them to New York on commercial jets.

Essentially, it appears people don't trust what's coming next, presenting a pragmatic pathway to gold-centered investments.

Gold Shines Brightest In The Darkness

While gold has a long history as a store of value, modern thinking – with its monetary policy theories and financial engineering – has often labeled the asset a barbaric relic. However, this relic has effectively become a financial panic room, outperforming multiple assets amid chaos rippling across the global financial ecosystem.

The hard numbers speak for themselves. Gold's continuous contract price at the Comex³ has moved up over 23% on a year-to-date basis. During the same period, the benchmark S&P 500⁴ slipped nearly 9%. Even worse, the tech-centric Nasdaq Composite index⁵ – hailed as a breakthrough not too long ago thanks to artificial intelligence – is down more than 13%.

Fundamentally, investors have every reason to believe that circumstances can become even more unpredictable. Thanks to another round of tariffs – triggered by President Donald Trump's new trade policies announced on Apr. 2, which was labeled Liberation Day – the high-level actions may impact global trade, affect corporate earnings and foster hedging activities across global financial markets.

True, the president announced a 90-day pause on tariffs via a social media post, temporarily igniting an equities rally. Nevertheless, China still faces a steeper 125% tariff due to the "lack of respect" the country has shown for global markets. This rhetoric represents a wild card, according to Wedbush analyst Dan Ives.

Ideally, the U.S. and China will enter "massive negotiations" in a bid for a longer-term solution. Still, how China responds is anyone's guess, especially amid the accusations thrown at the Asian juggernaut.

Subsequently, despite the occasional pops in the equities ecosystem, the overall trend is unmistaken: stock market benchmarks have been sliding while the Cboe Volatility Index⁶– commonly referred to as Wall Street's "fear gauge" – has spiked in recent days, raising serious concerns about the overall long-term direction of the market.

Under this environment, though, gold truly shines, demonstrating a seemingly inverse correlation to equities. During previous market corrections, the precious metal often delivered positive returns while stocks were falling. As such, bullion becomes a natural hedge – demonstrated by its record surge beyond the $3,200 level.

Further buttressing the case for gold is the stockpiling by central banks. Earlier this year, Bank of America  commodity strategist Francisco Blanch reported that the bullion rally has been largely fueled by "exceptional purchases by the official sector." It's not just individual investors that are worried about hedging against geopolitical and fiscal risks.

While the continued upside trajectory of gold isn't guaranteed, what makes the metal distinct from other assets considered by many to be relatively safe like bonds or real estate is that it has zero counterparty risk. In other words, the valuation of gold isn't tethered to corporate earnings, debt ratios or management guidance.

Instead, gold derives its value from its scarcity, universal recognition as a store of value and its role as a hedge during inflation, currency debasement and market volatility.

Gold Miners Provide An Alternative To The Mainline Asset

Historically, gold miners and the underlying asset shared a largely direct correlation: as the value of the metal increased, this generally lifted the mining complex. The reasoning is quite simple. Assuming all other things being equal, higher metal prices yielded greater revenue and earnings. Unfortunately, not all things have been equal recently, creating a lag between gold and the miners. Nevertheless, some investors are of the opinion that a mean reversion could be on the horizon.

In the past year, mining stocks were under significant pressure despite the blistering price of gold. Although gold miners' fate is tied to demand for the underlying products, miners can't survive on association alone. They are first and foremost businesses – and like any capitalistic enterprise, miners must improve financial performance while appropriately managing costs.

This latter component represents a major headache for the mining complex, especially in the field of rising wages and fuel costs. In addition, political issues – such as tax disputes in resource-rich Mali and project delays in Canada – stymied progress. Therefore, even with the soaring demand for gold, the juice simply wasn't worth the squeeze in the mining space.

However, robust price discovery may be quickly changing the narrative. With gold prices printing all-time highs, investor confidence may storm back into the miners. As this year progressed, gold-centric exchange-traded funds — which specifically also include miner-focused instruments — saw their biggest inflows in over a year, implying that institutional investors see sustained opportunity. What's more, even with the recent record prices, strength continues to beget strength, with analysts reporting sustained significant inflows.

Indeed, the economics of mining may be starting to shift. For months, the industry struggled with rising labor and energy costs, along with regulatory setbacks and geopolitical headaches. But now, with spot prices surging, those same companies are beginning to reclaim their margins. Revenue seems to be finally catching up to expenses, and in many cases, overtaking them.

In this type of environment, mining stocks don't just follow the price of gold – they could begin to reflect a levered response. As the market rewards profitability again, many miners who were left for dead may hold the potential to turn into vehicles for serious momentum. With capital potentially rushing back in and the supply-demand dynamics leaning in their favor, the mining complex looks like it is no longer stuck in neutral – it's back in motion.

Convenient And Ready-Made Alternatives

While the traditional safe haven may be physical gold – the kind that one can hold in one's hand – the harsh reality is that every asset category has its drawbacks. For actual bullion products, storage, security and liquidity challenges may represent significant challenges. Furthermore, bullion dealers can charge a hefty premium over spot prices, especially in this environment.

Alternatively, Sprott offers a series of relevant ETFs and physical trusts that deliver transparent pricing, daily liquidity, low bid-ask spreads and the reputational backing of one with much experience in the precious metals industry.

Among Sprott's lineup, the Sprott Active Gold & Silver Miners ETF GBUG offers a distinctive approach by using active management to target companies involved in gold and silver exploration and other operations. Unlike passive strategies that follow static indexes, GBUG applies a value-oriented and contrarian lens, allowing portfolio managers to respond dynamically to market conditions. This structure can appeal to investors who believe certain miners may be undervalued on a relative basis.

For those looking to capitalize on movements within the mining sector, the Sprott Gold Miners ETF SGDM provides exposure to larger, established gold mining companies. The fund tracks a customized index designed to emphasize companies with strong balance sheets and revenue growth potential. It's geared toward investors who want broad exposure to the industry's more established names, while still participating in the sector's upside. 

By contrast, the Sprott Junior Gold Miners ETF SGDJ targets smaller, earlier-stage mining firms. These companies may carry greater volatility but also offer outsized growth potential when gold is on the move. SGDJ suits investors with a higher risk tolerance who want a more aggressive approach to the gold trade through potential up-and-coming players.

Lastly, the Sprott Physical Gold Trust PHYS stands out for those who want direct exposure to gold bullion without dealing with physical handling. PHYS holds allocated physical gold in secure vaults, with regular audits and redeemability features for those who meet minimum thresholds. It's structured to appeal to investors seeking a more tangible link to the metal but with the ease and transparency of an exchange-traded product.

Gold's Enduring Relevance In A Shifting Landscape

In an environment marked by deepening uncertainty, gold has continued to play its role as a financial stabilizer. Whether it's inflation, geopolitical risk or shaken confidence in global markets, the precious metal has responded with strength – and that strength has drawn capital from both institutional and retail investors alike. It's not just a historical safe haven – it's potentially a present-day one, gaining relevance as volatility becomes the new normal.

At the same time, access to gold has evolved. Investors no longer need to contend with the burdens of storage, security or limited liquidity. With Sprott's suite of offerings, market participants can engage with gold and the broader mining sector through familiar, regulated channels. As demand rises and fear continues to ripple across asset classes, these strategies offer a practical path forward for those interested – grounded in historical clarity, flexibility and experience.

¹Gold and precious metals are referred to with terms of art like store of value, safe haven and safe asset. These terms should not be construed to guarantee any form of investment safety. While "safe" assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.

²A bullish market refers to a period when the prices of stocks or other assets are consistently rising.

³COMEX stands for the Commodity Exchange, which is a major marketplace for trading metals like gold, silver, copper, and aluminum.

⁴The S&P 500 (Standard & Poor’s 500) is a stock market index that tracks the performance of 500 of the largest publicly traded companies in the United States.

⁵The Nasdaq Composite Index is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange.

⁶The Cboe Volatility Index (VIX), often referred to as the “Fear Index,” measures the market’s expectations for volatility over the next 30 days. It is derived from the prices of S&P 500 index options and reflects anticipated price fluctuations in the stock market.

Featured image by 3D Animation Production Company on Pixabay.

This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice.

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