Exchange traded funds (ETFs) holding gold had a surge in purchases thanks to gold’s rally started by the weakening dollar and rising oil prices. Sharp inflows into gold-focused ETFs can be a bullish signal because it shows long-term retail investors are entering the market, Reuters reports. ETFs holding bullion are listed on stock exchanges and give exposure to the commodity without actual physical delivery to the individual investor. Some of the precious metal ETFs include:
- streetTracks Gold Shares (GLD) – up 4.5% year-to-date and 1.6% for the week; world’s largest gold ETF and holds 80% of the metal held by these types of funds
- iShares COMEX Gold Trust (IAU) – up 4.5% year-to-date and 1.4% for the week
- PowerShares DB Gold (DGL) – up 1.9% this week; this ETF holds futures contracts on gold and was launched in January 2007
- PowerShares DB Precious Metals (DBP) – up 2.1% this week; DBP invests in futures contracts of gold and silver; it was launched in January 2007
- iShares Sliver Trust (SLV) – up 1% year-to-date and 2.2% for the week; this is the top silver fund
From the looks of things, metal ETFs are quite shiny next to a dulling dollar. Kevin Baker for TheStreet.com comments that as the purchasing power of the dollar weakens, it takes more dollars to buy an ounce of gold. The dollar fell 1.11% against a handful of major currencies during the week ending Thursday, July 12.
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.