Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Sprott Physical Gold Trust as a Sentiment Tool

by August 31, 2022
August 31, 2022
Sprott Physical Gold Trust as a Sentiment Tool

I like sentiment indicators of all types, and I like the more obscure ones even better, the kind that almost nobody watches. This week’s chart shows one such sentiment indicator for gold prices.

The Sprott Physical Gold Trust trades under the symbol PHYS, and it is a special type of investment vehicle that is different from an ETF like GLD. It does own physical gold, and has very specific rules about redeeming shares for that gold. Its shares generally trade at a slight discount to the net asset value (NAV), but that discount varies over time. You can read more at their website here.

Most of the time, the spread between the share price and the NAV is negative, meaning that you can buy the shares for less than they are actually worth. But since exchanging those shares for the actual gold is a little bit difficult, you cannot easily arbitrage that negative premium for a profit.

When gold investors are getting excited and expecting an uptrend, they get motivated by buy shares of the Sprott Physical Gold Trust. That incremental additional demand causes the share price to rise as the buyers snap up all of the available shares, and so this premium versus NAV starts to get smaller. Sometimes it even goes positive when traders get really desperate to own these shares. That is not the situation we are seeing now.

On Tuesday, Aug. 30, the discount below NAV was -1.96%, which is a pretty big negative reading. It is not the biggest ever, but it is a reading that is consistent with meaningful bottoms for gold prices. A big negative spread comes about when owners of these shares think gold is headed lower, and they get motivated to sell, so they will accept a price well below the NAV. The message is that “the crowd” thinks gold prices are going lower, and they are willing to take a big haircut just to have the privilege of getting out of these shares. That is a sign that sentiment toward gold is pretty washed out, befitting a bottoming condition for gold prices.

You can track this data yourself at this link.

0
FacebookTwitterGoogle +Pinterest
previous post
Persil advert banned for misleading green claims
next post
Questions That You MUST Ask

You may also like

Stock Market Today: NVDA Reports, Tech Lags, Financials...

August 28, 2024

Gaining an Edge in a Tough Trading Year

April 20, 2023

Stocks In Focus: Three Charts to Watch

March 29, 2025

Rates Look Set to Rise as TLT Resumes...

March 17, 2024

The Hoax of Modern Finance – Part 5:...

January 26, 2024

Growth Stocks Roar Into The New Year. This...

February 4, 2023

Top Ten Charts to Watch for October 2024

September 27, 2024

When You See Amazon Turning Around Beautiful Things...

March 31, 2023

Will Catalysts Push Markets HIGHER or Drag Them...

January 31, 2024

Learn From Dave’s Trades

August 10, 2022

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Disabling Trump’s “Tariff Button”

      June 5, 2025
    • ‘Sick puppy’ Tim Walz should never have been on Dems’ 2024 ticket, Trump says

      June 5, 2025
    • Federal judge orders Trump to restore funding to Clinton-era agency gutted by DOGE

      June 5, 2025
    • Musk says Trump would have lost 2024 election without him as ‘Big Beautiful Bill’ feud continues

      June 5, 2025
    • Ex-Biden adviser calls Jean-Pierre ‘kinda dumb,’ deletes tweet, says she’s not a ‘genius-level Black woman’

      June 5, 2025
    • ‘Coming for us’: Expert sounds alarm on CCP’s mission to ‘kill Americans’ after FBI makes shocking arrests

      June 5, 2025

    Categories

    • Business (8,148)
    • Investing (2,010)
    • Politics (15,535)
    • Stocks (3,128)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved