Gold prices are hovering above $1,700 an ounce and ETFs that invest in the precious metal could move higher in 2012 on Europe’s lingering debt crisis and further monetary easing from central banks.
Gold prices dropped 1.2% for the week ended Feb. 10, settling at around $1,725 an ounce, according to the Wall Street Journal.
After Eurozone leaders withheld approval of the second Greece bailout, investors started moving back into cash. The stronger U.S. greenback also contributed to the small sell-off in gold. Meanwhile, others jumped ship, anticipating a sharper downturn.
Looking ahead, Greece will dominate the gold outlook. However, according to a Kitco News Gold Survey on expected gold prices, most analysts expect prices to rise this week but still stay within the current price range, reports Forbes. [Gold ETFs and Greece: What’s Next?]
“There is good bargain hunting as gold dips below $1,710 area,” Afshin Nabavi, head of trading at trading house MKS Finance, said in the Forbes article.
“Markets change and evolve and right now gold is trading more like a currency than the safe haven it once was,” Frank Lesh, analyst FuturePath Trading, said. “It’s correlation with the dollar (negative) and euro (positive) is very strong. It is also trading as a risk asset as well and this is evident as it rises and falls with equity markets now. Gold is correcting the rally from the 1520’s to the 1760’s. I expect more consolidative trade with a downside bias.”
The largest gold ETFs and ETNs include:
- SPDR Gold Shares (NYSEArca: GLD)
- iShares Gold Trust (NYSEArca: IAU)
- ETFS Physical Swiss Gold Shares ETF (NYSEArca: SGOL)
- ETFS Physical Asian Gold Shares ETF (NYSEArca: AGOL)
- PowerShares DB Gold Fund (NYSEArca: DGL)
- RBS Gold Trendpilot ETN (NYSEArca: TBAR)
- ETRACS CMCI Gold ETN (NYSEArca: UBG)
Gold miner ETFs include:
- Market Vectors TR Gold Miners ETF (NYSEArca: GDX)
- Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ)
- Global X Gold Explorers ETF (NYSEArca: GLDX)
- Global X Pure Gold Miners ETF (NYSEArca: GGGG)
- Powershares Global Gold and Precious Metals Portfolio ETF (NYSEArca: PSAU)
- iShares MSCI Global Gold Miners Fund (NYSEArca: RING)
- Direxion Daily Gold Miners Bull 2x Shares ETF (NYSEArca: NUGT)
- Direxion Daily Gold Miners Bear 2x Shares ETF (NYSEArca: DUST)
Some inverse and leveraged gold ETFs and ETNs:
- ProShares Ultra Gold ETF (NYSEArca: UGL)
- ProShares UltraShort Gold ETF (NYSEArca: GLL)
- Powershares DB Gold Double Long ETN (NYSEArca: DGP)
- Powershares DB Gold Double Short ETN (NYSEArca: DZZ)
- Powershares DB Gold Short ETN (NYSEArca: DGZ)
- VelocityShares 3x Long Gold ETN (NYSEArca: UGLD)
- VelocityShares 3x Inverse Gold ETN (NYSEArca: DGLD)
For more information on gold, visit our gold category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.