Gold has a new heavyweight in the market, and it could move gold exchange traded funds (ETFs). China, the world’s largest producer and consumer of gold, is striking out for a greater stake in gold, even as sideways markets keep the metal trading in a tight range.
The People’s Bank of China and three other economic-policy agencies announced that the country will import and export more gold since domestic interest in gold investment is rising, reports Chuin-Wei Yap for The Wall Street Journal. Currently, gold is one of the most thinly-traded commodities on the Shanghai Futures Exchange.
As a result of China’s decision, gold ETFs are at their highest levels in two weeks. SPDR Gold Shares (NYSEArca: GLD) is up 1.1% so far today.
Jordon Roy-Byrne for Minyanville believes that the trend for gold stocks is firmly in place and the bull market for gold investments is only getting started. Gold and gold mining shares currently only make up 0.80% of global assets as of 2009, which means that a large pool of money is currently uninvested in the gold markets, remarks Jordon. [Gold ETF Slashes Fees and Sees Results.]
Kinross Gold Corp. (NYSE: KGC) is looking to acquire Red Back Mining Inc. in a deal that values the company at $7.1 billion, reports Shira Ovide for The Wall Street Journal. During a more stable market, gold usually ebbs as traders turn to growth assets, but continued fears of a stagnating economy has helped push gold investments. [Gold Miner ETFs: A Better Option?]
- Market Vectors Gold Miners ETF (NYSEArca: GDX): Holds gold mining stocks
- Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ): Holds small- and mid-cap gold mining stocks
- PowerShares DB Gold Fund ETF (NYSEArca: DGL): Holds gold futures
- SPDR Gold Shares ETF (NYSEArca: GLD): Holds physical gold
- iShares Comex Gold Trust ETF (NYSEArca: IAU): Holds physical gold
- ETFS Gold Trust (NYSEArca: SGOL): Holds physical gold in Swiss vaults
Max Chen contributed to this article.
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.