Gold is attracting bargain hunters after a sharp pullback that has erased billions of value in bullion-backed ETFs.
Gold traders are the most bullish since before the bear market began two months ago, Bloomberg News reports.
Meanwhile, weekly sales of gold held in exchange traded products are poised for the second-lowest level since March after the value of holdings fell by about $45 billion this year, according to the story. [Gold ETFs: Six Straight Months of Outflows]
SPDR Gold Trust (NYSEArca: GLD) was on track for a weekly loss after Friday’s nonfarm payrolls report. [Gold ETFs Fall]
Market Vectors Gold Miners (NYSEArca: GDX) and Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ) also lost ground this week. Gold miners have been one of the worst performers so far this year. [Gold Miner ETFs Bouncing on Heavy Trading Volume]
Gold prices have declined 25% from the September 2011 peak and May 2013 bottom of $1,355, with a heavy sell-off in mid-April, which sent prices plunging 12% over five sessions, reports Trang Ho Investor’s Business Daily.
Daryl Montgomery, author of four investing books, though, points to the massive drop after a downtrend marks a “classic bottoming pattern” that has cleared the markets of sellers.