Investors nervous about the government’s plan to extend a lifeline to embattled financials flocked to safe havens today, including gold and its related exchange traded funds (ETFs).
The price of the precious metal jumped nearly 4% on Monday, report Frank Tang and Jan Harvey for Reuters. One gold options floor trader said he wouldn’t be surprised to see the price jump to $950 by the end of the week.
Another traditional factor in soaring gold prices has been dampened, though: after the price increase, demand in India has almost vanished. It’s prompting dealers and retailers to offer discounts, Biman Mukherji for Reuters reports. The wedding season in India is a typical time for the price of gold to soar, as brides receive the metal as a gift. Strong buying was expected to hold until October because of a series of Hindu festivals, as well.
- SPDRs Gold Shares (GLD), up 8.3% year-to-date
- iShares Comex Gold Trust (IAU), up 8.1% year-to-date
- PowerShares DB Gold (DGL), up 6.2% year-to-date
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.