Sprott Physical Gold Trust (PHYS) Surges 0.69% on Three-Day Rally Amid Macroeconomic Uncertainty and Robust Gold Demand

Sprott Physical Gold Trust (PHYS) surged 0.69% on Monday, marking three consecutive days of gains with a cumulative 2.94% rise over the past three sessions. The stock hit an intraday high of $28.18, its highest level since October 2025, driven by sustained investor demand for physical gold exposure amid macroeconomic uncertainties.

Strong capital inflows through the Trust’s at-the-market (ATM) program fueled asset growth, with gross proceeds reaching $1.16 billion in the first half of 2025—an 800% year-over-year jump. This influx enabled the Trust to expand its gold holdings by 10% to 3.61 million ounces by June 30, reinforcing its role as a scalable vehicle for investors seeking tangible asset exposure. The correlation between inflows and asset growth has been critical in aligning the Trust’s net asset value (NAV) with gold price trends.

Net asset value per unit rose 25.2% to $25.78 during the same period, closely mirroring the 25.9% increase in gold prices. The Trust’s total NAV swelled to $12 billion, supported by $2.26 billion in unrealized gains. Despite these metrics, units traded at a 1.7% discount to NAV on average, reflecting structural challenges in liquidity and arbitrage efficiency. Addressing this gap remains key to narrowing the valuation gap between the Trust and direct gold ownership.

Operational improvements further bolstered investor appeal, with the Trust’s management expense ratio (MER) declining from 0.41% to 0.39% by June 30. This reduction, achieved amid rapid asset growth, highlights cost efficiency gains that enhance unitholder returns. The Trust’s low beta of 0.11 and stable market capitalization of C$13.08 billion underscore its position as a low-volatility proxy for gold, attracting risk-averse investors seeking diversification.

While the discount to NAV persists, the Trust’s ability to scale assets, optimize costs, and maintain gold price alignment positions it as a resilient option in a fee-sensitive market. Future performance will hinge on gold price dynamics and efforts to address structural inefficiencies, ensuring the Trust remains competitive in the evolving commodity exposure landscape.