As uprisings, social unrest and market volatility grip the Middle East region, anxious investors are turning to exchange traded funds (ETFs) that offer a little more safety in these troubled times.
Gold. Volatility in the Middle East helped push gold futures toward new records reports Tatyana Shumsky for The Wall Street Journal. Gold prices settled at $1,415 on Thursday, just shy of a seven-week high. Since Jan. 27 lows, gold prices have been gaining as anti-government protests hit the Middle East. [Gold ETFs Show Their Safe-Haven Mettle.]
ETFS Physical Swiss Gold (NYSEArca: SGOL) and SPDR Gold Shares (NYSEArca: GLD) have gained nearly 5% in the last month.
Chuck Butler, president with EverBank World Markets, remarks on how “gold is an uncertainty hedge, and there’s too much uncertainty in the world today and it just keeps mounting.” Gold remains the standard hedge and store of value in volatile political and economic times since the precious metal has little industrial applications.
Additionally, the instability in crude oil- and gas-producing countries have pushed energy prices higher, with crude oil touch $100 a barrel Wednesday. United States Commodity Brent Oil (NYSEArca: BNO) isn’t a safe-haven, but it’s attracting interest as investors search for gains where they can get them. [Oil ETFs Surge As $100 Oil Returns.]
Investors this week also rushed to U.S. government bonds, sending prices up and yields south, writes Tom Petruno for The Los Angeles Times.
Seven-year notes on Thursday saw solid demand. The government sold $29 billion worth of the notes at a yield of 2.9%. iShares Barclays 3-7 Year Treasury Bond Fund (NYSEArca: IEI) now has a yield of 2.1%.
For full disclosure, Tom Lydon’s clients own GLD.
Max Chen contributed to this article.