The largest exchange traded fund following gold prices was up more than 2% in preopen trading Friday as futures rose above $1,870 an ounce, a new record high.
SPDR Gold Shares (NYSEArca: GLD) added 2.3% before the bell.
The precious metal was on track for the longest streak of weekly gains since April 2007 on worries the global economy is in a slowdown, Bloomberg reported.
“The drivers of the gold price at this point in time are all future expectations, such as more global liquidity and worsening of the status quo in global GDP,” said Bayram Dincer, an analyst at LGT Capital Management, in the report.
Gold prices are also rising on concern over Europe’s banks in the debt crisis, while Venezuela said it plans to nationalize its gold mining industry. [Gold ETFs Rally]
“While gold’s latest steep ascent is provoking some talk of a bubble, the reasons for buying gold rather than equities or other commodities are unchanged, and risk aversion is likely to persist for as long as world leaders are perceived to be short of ideas for stimulating recovery,” a trader told FastMarkets.
The gold ETF is up 28% year to date. [Wells Fargo Warns on Gold Bubble]
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD.