Gold’s recent rally is the stuff of precious metal investors’ dreams as the commodity continues to gain amid the uncertainty of the Coronavirus pandemic. As the demand for safe havens like precious metals continues, this only helps to fuel gold-backed funds like the VanEck Merk Gold Trust (OUNZ).
OUNZ seeks to provide investors with an opportunity to invest in gold through the shares and be able to take delivery of physical gold in exchange for those shares. The Trust’s secondary objective is for the shares to reflect the performance of the price of gold less the expenses of the Trust’s operations.
Each share represents a fractional undivided beneficial interest in the Trust’s net assets. The Trust’s assets consist principally of gold held on the Trust’s behalf in financial institutions for safekeeping.
OUNZ offers investors:
- Deliverability: VanEck Merk Gold Trust holds gold bullion in the form of allocated London Bars. It differentiates itself by providing investors with the option to take physical delivery of gold bullion in exchange for their shares.
- Convertibility: For the purpose of facilitating delivery, Merk has developed a proprietary process for the conversion of London Bars into gold coins and bars in denominations investors may desire.
- Tax Efficiency: Taking delivery of gold is not a taxable event as investors merely take possession of what they already own: the gold.
As mentioned, one of the key benefits of OUNZ is the ability to exchange shares of the ETF for physical gold. Per the fund’s website, if you’re an “investor interested in taking delivery of physical gold in exchange for your OUNZ shares (Delivery Applicants), you must submit a signed Delivery Application to Merk Investments LLC (the “Sponsor”).
OUNZ data by YCharts
Gold Prices Could Keep On Trucking Higher
Where do gold prices go from here? Per a Kitco News report, Wall Street and Main Street investors are predicting that up is the only way for the precious metal to go from here.
“Sean Lusk, co-director of commercial hedging at Walsh Trading, said that growing economic uncertainty, a low interest rate environment, and a weaker U.S. dollar are creating the perfect storm for gold prices,” the report noted. “He added that the market above $1,900 has hit his 23% target for the year.”
Political pundits are also backing gold’s bullish tendencies as of late.
“Most Americans will be blindsided by what’s about to happen,” says Dr. Ron Paul, former U.S. Presidential candidate and Congressional veteran.
“Right now, there is nothing happening in the global economy that says you shouldn’t own gold,” he said. “The market is completely overbought, but with this momentum, I think we could see prices climb another 10% higher before we see some significant profit-taking.”
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