This week, the price of gold surpassed $4,600 per troy ounce, once again capturing the market's attention, driven by an unusual convergence of monetary, fiscal, and geopolitical risks. Unlike previous cycles, specialists warn that this rally is not just technical but reflects a structural search for shelter in an environment of increasing uncertainty. John Murillo, Chief Business Officer of B2BROKER, explained that gold has been 'favored by an extraordinary combination of risks, including monetary, fiscal, and geopolitical factors.' 'Many of us are aware that gold has a significant disadvantage compared to traditional income-generating assets: it does not offer coupons or dividends,' he noted. A clearly perceptible psychological reaction is observed among operators in the face of a wide range of risks derived from disruptive events, which are extremely difficult to measure and, therefore, to incorporate into credible data-based forecasts. Regarding gold ETFs (Exchange-Traded Funds), it is advisable to distinguish two main categories. First, there are the most liquid instruments, such as SPDR Gold Shares (GLD, formerly SPDR Gold Trust) and UGL (ProShares Ultra Gold). However, Murillo said he would not recommend leveraged ETFs, as the psychological nature of the current rally suggests a higher risk of a sudden correction, although it would likely be short-lived due to fundamental reasons. 'In the second category are what I would call 'physical gold ETFs,' where the collateral consists of physical metal—at least according to the funds' own statements,' he explained. This type of ETF is particularly suitable for skeptical investors, that is, those who express reasonable doubts about the backing of 'paper' gold ETFs, he explained. Not only is the White House maintaining an unusually active geopolitical agenda—including issues like the status of Greenland—but there is also an unexpected judicial process involving the Chairman of the Federal Reserve, Jerome Powell. Collectively, these factors significantly increase the attractiveness of gold. In response, 'numerous central banks and institutional investors around the world continue to accumulate physical gold in a disciplined and non-speculative manner, which makes this trend resilient to short-term market noise.' Nevertheless, it is difficult to quantify this notable rally. For this reason, previous gold bull cycles have tended to be relatively limited in duration,' he noted. But he explained that this time the situation is different. Among them are products such as PPFB (iShares Physical Gold ETC) and VZLD (WisdomTree Physical Gold).
