Have metals and their exchange traded funds (ETFs) entered a holding pattern?
Nell Sloane for FX Street says they very well may have. The U.S. dollar dipped slightly overnight and oil prices have also fallen – both signs hinting at a bear market for metals after a long bull run.
The gold industry, Sloane says, is still considering the news of a record low in Turkish gold imports from the prior trading session. However, Russian gold and currency reserves rose – an indication that Russia is looking to increase its holdings.
If the dollar continues to strengthen, gold will continue to weaken. Federal Reserve Chairman Ben Bernanke hasn’t given any indication of further interest rate cuts (a move that typically weakens the value of the dollar). Gold has some challenging times ahead of it.
Gold ETFs are the streetTRACKS Gold Shares (GLD) and the iShares COMEX Gold Trust (IAU), which both hold gold bullion. They’re both holding steady today – GLD is down ever so slightly, while IAU is up a smidge. Gold futures posted gains to $909.60 after the dollar weakened and jobs data was less than stellar, reports Polya Lesova for MarketWatch.