Investor sentiments change with the seasons and summer proved to be a lackluster season for gold. Nevertheless, a new season may provide gold and related exchange traded funds (ETFs) with the opportunity to shine.
A recent dip in gold prices renewed fund manager interest in gold, citing the pullback as a buying opportunity, remarks Dan Well for MoneyNews.
Gold abated from its recent high of $992.10 an ounce on June 3, but many investors still believe inflation will kick in sooner or later. Some portfolio managers believe gold may even touch $1,300 as soon as spring. Gold is a popular hedge in inflationary times.
In the short term, seasonal changes may be a significant factor in gold’s decline. Historically, gold prices tend to dip during summer because the period lacks big gift-giving holidays. But purchases of gold-related products resume in the fall when the Indian wedding season, Ramadan, Christmas, and the Chinese New Year kick in.