President Trump expects to impose tariffs on Canada and Mexico on February 1 – which is spurring concerns for potential interest rate hike risks and higher inflation. Should that happen, gold prices could push considerably higher.

Remember, “Trump set a Feb. 1 deadline for imposing 25% tariffs on imports from Mexico and Canada unless the countries move to halt flows of illegal immigrants and the deadly opioid fentanyl into the U.S. He also said he would slap a 10% tariff on Chinese goods over that country’s role in the fentanyl trade,” says Reuters.

In addition, some analysts believe gold’s latest momentum is just beginning. Not only could potential rate hike concerns and inflationary risks drive it higher, but also geopolitical issues, such as the ongoing feud between Russia and Ukraine. 

While you can always buy gold stocks, like Barrick Gold and Newmont Corp., gold ETFs offer more exposure to many more gold stocks at a lower cost.

Markets are most active at two specific times of the day. Click here to see which is best for entering trades.

Look at the VanEck Vectors Gold Miners ETF (GDX), for example.

One of the best ways to diversify at less cost is with an ETF, such as the VanEck Vectors Gold Miners ETF (GDX).  Not only can you gain access to some of the biggest gold stocks in the world, you can do so at less cost.  

With an expense ratio of 0.51%, the ETF holds positions in Newmont Corp., Barrick Gold, Franco-Nevada, Agnico Eagle Mines, Gold Fields, and Wheaton Precious Metals to name a few.

Even better, shares of mining stocks often outperform the price of gold. That’s because higher gold prices can result in increased profit margins and free cash flow for gold miners.  In addition, top gold miners often have limited exposure to riskier mining projects.

Sincerely,

Ian Cooper