After a rough year thanks to rising interest rates feeding into a stronger dollar, gold and silver have been down for most of 2022, but there could be signs of a bounce.
With the U.S. Federal Reserve continuing to process inflation data, how the central bank adjusts its monetary policy will continue to play a pivotal role in price action for gold and silver. Precious metals can offer an ideal safe haven asset to park capital when markets go awry, especially if a recession hits the economy.
In terms of demand for physical gold and silver, Kitco News reported that the "U.S. Mint continues to see lackluster demand for its American Eagle gold and silver bullion coins; however, analysts note that global demand for physical gold remains healthy in October as the precious metal flows from West to East."
"The U.S. Mint said that it sold 62,500 ounces of gold in various denominations of America Eagle Gold bullion coins," the report added further. "Gold coins sales were up 25% from September’s low; however, compared to last year, demand for gold bullion is down 59%."
Silver is also seeing an uptick in demand. Nonetheless, its overall demand, like that of gold, is still down when looking at the macro trend.
"Thesilver marketis seeing a pickup in demand, with sales hitting their highest level in five months," the report added. "The U.S. Mint said it sold 1.258 million ounces of silver in October. Silver demand increased 51% from September. For the year, silver bullion sales are down 17%."
2 Precious Metal Miners ETFs
These could be early signs of demand picking up for both precious metals. As opposed to playing gold and silver, investors can also opt for a backdoor move on miners via precious metal mining exchange traded funds (ETFs) from Global X.
For gold, investors can consider the Global X Gold Explorers ETF (GOEX). GOEX seeks to provide investment results that generally correspond to the price and yield performance of the Solactive Global Gold Explorers & Developers Total Return Index, which is a free float-adjusted, liquidity-tested, and market capitalization-weighted index designed to measure broad-based equity market performance of global companies involved in gold exploration.
For silver, investors can look at the Global X Silver Miners ETF (SIL). Per the fund’s description, SIL seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Global Silver Miners Total Return Index.
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