"VanEck Merk Gold ETF (NYSEARCA:OUNZ) has delivered exceptional returns over the past year, nearly doubling in value as gold prices climbed. This performance mirrors SPDR Gold Shares (NYSEARCA:GLD) because both funds provide direct exposure to physical gold prices, creating a tight correlation between the ETFs and the underlying commodity. For investors holding OUNZ or considering it now, the question isn't whether this ETF is well-constructed. It is."
"The biggest macro factor affecting OUNZ is the direction of real interest rates, which measure nominal Treasury yields minus expected inflation. When real yields fall, gold becomes more attractive because it doesn't pay interest. When they rise, gold loses appeal relative to bonds. The macro environment for gold currently faces a tug-of-war. Energy costs have declined significantly, which typically dampens inflation expectations and makes bonds more attractive relative to non-yielding assets like gold."
"Investors should watch the 10-year Treasury Inflation-Protected Securities yield, published daily by the U.S. Treasury. A move above 2% would signal tightening financial conditions that could stall gold's rally. A drop toward 1% or lower would suggest the opposite. This metric updates every trading day and directly influences how institutional investors allocate to non-yielding assets like gold. Allocated Gold and Liquidity OUNZ's physically allocated structure creates both an advantage and a constraint."
VanEck Merk Gold ETF (OUNZ) nearly doubled over the past year as gold prices climbed, mirroring GLD due to direct physical-gold exposure and tight correlation with metal prices. Future performance depends chiefly on real interest rates — nominal Treasury yields minus expected inflation — since falling real yields boost gold while rising real yields favor bonds. Investors should monitor the 10-year TIPS yield: above 2% could signal tighter financial conditions and stall gold; near 1% or below would support gold. OUNZ's physical allocation allows share redemption for bullion but requires full vault backing, creating advantages for tangible exposure seekers and constraints on liquidity and operations.
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