Gold exchange traded funds have already recovered a big chunk of the loss they absorbed in September after prices held the line at $1,600 an ounce.
ETFs that follow gold prices are up about 7% over the past month. The big question is if another record-breaking run at $1,900 an ounce is in the cards, although there may be some chop and consolidation after the sharp bounce the past week.
Gold bulls say the fundamentals driving gold remain firmly in place after the latest bailout in Europe.
“We’re finally seeing gold prices move up in the flight to quality, along with bonds, the dollar and then yen, which is a positive for long term investors,”Adam Klopfenstein, senior market strategist with MF Global, said on CNN Money. “When we weren’t seeing gold rally in the face of economic uncertainty, a lot of investors didn’t see the point of buying it, and moved to the sideline.” [Gold ETFs Vault 3% as Metal Regains $1,700]
Investors are watching recent market reactions to the Eurozone debt crisis and to the latest U.S. GDP report.
“It looks like we’re going to be dealing with continued concerns about Europe, because even though leaders seem to be working harder, we aren’t going to get a resolution overnight,” Carlos Sanchez, precious metals analyst at CPM Group, said. “And even if the United States can avoid a double dip, the data is showing that the economy is treading just above recessionary levels.” [A Quintet of Top Gold ETFs]