Some investors were caught by surprise when gold prices stepped back from their highs, but today’s moves shows that gold exchange traded funds (ETFs) still have appeal.
John Spence for MarketWatch reports that major gold ETFs are seeing net redemptions of around $2.5 billion thus far in 2011, which may seem high, but compared to the $21 billion raised, it is not alarming. Some analysts say that year-end re-balancing can be a culprit, as can the rally in U.S. equities that have been a welcome sign. [How to Play Jim Roger’s Picks With ETFs.]
If there are any concerns that safe-haven interest in gold is dropping off, today’s moves should put those to rest. ETFS Physical Swiss Gold (NYSEArca: SGOL) and SPDR Gold Shares (NYSEArca: GLD) were up more than 2% in early trading. Despite a slight pullback from that, they’re still up nearly 1%. [How Gold Miner ETFs Stay Strong Even As Prices Cool.]
Tisha Guerrero contributed to this article.