Gold exchange traded funds (ETFs) are continuing to appeal to investors, and this attraction appears to be growing as we get deeper into earnings season and more economic numbers are poised to be released. What’s the connection?
As of Tuesday, gold is up because of a light spending spree after worries over the health of the U.S. banking sector dragged down equities and enhanced gold’s safe-haven appeal. Alix Steel for TheStreet notes that this could continue as earnings season delivers some more disappointing results. Add to that some more weak economic data and rising unemployment, and it could send more people back into safe havens.
Two catalysts to watch for are the Federal Reserve’s market commentary, which will be released next week, and first-quarter GDP numbers.
The upward momentum is still keeping traders guessing and this kept the price of gold capped at $890 per ounce, possibly waiting and watching to see how the equities markets will react. Risa Maseda for Reuters reports that holdings at the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares (GLD) remained unchanged on Monday.
Despite the slight rally, gold has been unable to penetrate the $900 per ounce mark, primarily because of waning demand from the industry and jewelry dealers. Silver is up 2.3%, or 30 cents, to $12.11 per ounce as of Monday.
- SPDR Gold Shares (GLD): up 0.5% year-to-date
- iShares Silver Trust (SLV): up 6.2% year-to-date
For full disclosure, some of Tom Lydon’s clients own shares of GLD and SLV.
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.