The holiday season not only presents an opportunity to spend time with loved ones, it also allows investors to tilt their portfolios towards assets that can capture short-term upside. One of those is gold.

Quantitative analysis website Quantpedia noted the seasonality of gold exposure this time of year. Because gold is an asset uncorrelated with the broader market, it can exhibit patterns that don’t generally coincide with the overall stock market. Furthermore, the precious metal can be subject to its own intrinsic patterns, which include holiday influences. Quantpedia looked at how cultural holidays correlate with gold demand, and the results indeed show a connection.

“Our empirical findings confirm the existence of a robust gold‐price drift around major wealth‐oriented holidays across all principal cultural zones,” they said. “The aggregated Global Holiday Drift strategy not only yields economically meaningful returns with modest risk but also provides actionable insights for investors seeking to capitalize on calendar effects rooted in socio-cultural consumer behavior.”

Outside of the holidays, the fundamental demand drivers for gold remain. The second rate cut of the year in October further intensified the “debasement trade,” highlighting the ongoing movement away from fiat currencies like the dollar and into other assets like gold. In a recent Sprott Precious Metals Report, market strategist Paul Wong noted that gold achieved new highs as “investors rotate toward hard assets to preserve purchasing power and hedge systemic and geopolitical risks.”

“This shift is not isolated to any single region—the U.S., Europe, Japan, and other developed economies are experiencing similar fiscal and monetary pressures,” Wong added.

2 Paths for Gold Exposure

Rather than purchase gold bullion, Sprott offers various paths to exposure via their precious metals funds. Two for gold specifically are the Sprott Physical Gold Trust (PHYS) and the Sprott Gold Miners ETF (SGDM).

Those looking to mimic gold bullion exposure without the storage hassles, can look to PHYS. The fund offers easy access to pure-play gold exposure, but adds a degree of flexibility by allowing investors to convert their fund shares into physical bullion. Additionally, investors can convert their shares to bullion if they want a more tangible investment feel.

Gold miners are another path to exposure albeit indirectly. As demand for the metal rises, supportive services in the gold industry such as mining can also exhibit upside. As opposed to building a portfolio of gold mining stocks or over-concentrating in one name, SGDM adds broad-based exposure through the structural benefits of an ETF like trading flexibility, cost-effectiveness, and tax efficiency.

For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.

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