Gold exchange traded funds opened higher Thursday as the precious metal reclaimed $1,800 an ounce while European markets fell hard on lingering debt woes.
SPDR Gold Shares (NYSEArca: GLD), ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) and iShares Gold Trust (NYSEArca: IAU) were up about 1.5%.
Gold prices were rising Thursday after Wells Fargo earlier this week said the yellow metal is a “bubble that is poised to burst.”
“There could be substantial risk to gold once the fear that the world is coming to an end subsides,” Wells Fargo analyst Dean Junkans told Bloomberg. “We are worried about the downward risk.” [Gold ETFs Slightly Higher; Wells Fargo Warns on Bubble]
Still, gold prices were higher Thursday as investors rushed into safe havens and European stocks suffered heavy losses. In U.S. economic data, July inflation was hotter than expected.
“U.S. numbers are back in focus today, though it matters slightly less after the Fed’s tentative commitment to potentially hold rates at ultra-low levels until mid 2013,” broker VTB Capital said in a FastMarkets report. “By setting a time frame, the Fed could effectively start changing inflation expectations and risk Japan-style stagnation. Either way, gold is well supported in the short-to-medium term, while uncertainty remains over the Eurozone debt crisis and market participants are unlikely to start liquidating substantial longs just yet aside from small scale profit taking.”
SPDR Gold Shares (NYSEArca: GLD)
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Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD.