Sprott Physical Gold Trust: 2025 Review and the 2026 Outlook

Sprott Physical Gold Trust (PHYS) entered 2025 as a core vehicle for investors seeking direct exposure to allocated physical gold. Over the year, PHYS reinforced its role as a low-counterparty-risk alternative to futures-based products, holding allocated bullion in secure vaults while offering a straightforward play on the metal. Its appeal to long-term investors rests on physical backing, transparent holdings reporting and relatively simple mechanics compared with more complex derivatives or leveraged instruments.

In 2025, investor flows into bullion vehicles were driven by a mix of macroeconomic uncertainty, intermittent inflation surprises and continued central-bank interest in gold as a reserve asset. For PHYS specifically, performance patterns reflected broader bullion price action and the interplay of premium/discount dynamics relative to net asset value (NAV). Liquidity and spreads widened at times during heightened volatility, underscoring the importance of execution timing for tactical traders while leaving buy-and-hold investors largely unaffected.

Key structural features to watch include storage arrangements, insurance protocols, management fees and tax treatment — all factors that can influence net returns versus physically-backed ETFs and trusts from other issuers. PHYS’s segregated allocation reduces counterparty exposure but does not eliminate market risk tied to the underlying gold price.

Looking toward 2026, several macro drivers will likely shape PHYS’s trajectory. Real interest rates remain primary: falling real rates tend to support gold, while rising real yields can pressure bullion. Central-bank demand, geopolitical tensions, currency volatility (notably USD strength) and inflation expectations are additional determinants. On the supply side, mining output and secondary market flows matter less for short-term swings but can influence longer-term price discovery.

For investors considering PHYS heading into 2026, prudent steps include evaluating position sizing, monitoring premium/discount behavior versus NAV, and comparing expense structures with alternatives such as GLD or IAU. Scenario planning — bullish (persistent inflation or renewed geopolitical risk), base case (sideways gold within a range), and bearish (sharp rate-driven sell-off) — can help set expectations and stop-loss thresholds.

In short, PHYS remains a credible vehicle for physical gold exposure. Its performance in 2026 will hinge on macroeconomic developments and investor flows; disciplined allocation and attention to execution costs will be key for optimizing outcomes.