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Gold Regains Its Mojo Against Declining Dollar

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Just when you thought it as safe to head back into the U.S. dollar, gold regains its mojo during Monday’s trading session. In recent weeks, gold and equities were languishing amid a September sell-off, but the precious metal could end the month on a high note.

“Gold has started to recuperate losses as the dollar has eased and real rates have edged lower,” said Standard Chartered analyst Suki Cooper, in a CNBC article.

“There are plenty of risk events this week for gold to take its cue from, ranging from the first of three U.S. presidential debates to unemployment and inflation data,” she added.

Where do gold prices go from here?

“Gold has found a new key technical support level at $1,850. You are probably seeing gold investors starting to feel a little more positive about scaling back into gold,” said Edward Moya, senior market analyst at OANDA in New York.

“The fact that gold is down over a couple of hundred dollars from its record highs, investors see this as a good opportunity to get in.”

Gold Price in US Dollars Chart

Gold Price in US Dollars data by YCharts

Meanwhile, investors looking to get gold exposure without holding the physical shares, but with the option to do so in the future, can look at 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, and the Trust’s assets consist principally of gold held on the Trust’s behalf in financial institutions for safekeeping.

OUNZ can offer investors the following:

  • 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.

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