Gold exchange traded funds posted respectable gains in the third quarter despite a miserable September. Technical analysts are talking about a potential “double top” in gold, but ETFs could get a seasonal bounce in the fourth quarter.

The precious metal is on track for its worst month since October 2008. [Gold ETFs End Tough Month]

Volatility in gold prices has spiked, and investors could continue to see big moves for the rest of 2011. Gold investors will be watching Europe’s debt turmoil, fourth-quarter U.S. GDP data and any signs of further easing steps from the Federal Reserve. Washington is facing deadlines on a plan to reduce the U.S. deficit.

Gold tends to see strength in the fourth quarter, helped by the traditionally strong buying season, especially in Asia. [How Do You Value Gold ETFs?]

Meanwhile, gold demand from India and China, two of the world’s biggest consumers of gold, is rising. India is just kicking off its traditional wedding season and China is preparing for its National Day Golden Week holiday next week.

“Although buying interest out of India has been particularly strong, support is broad-based throughout Asia, with physical demand in places like Thailand and China also rising,” Walter de Wet, head of commodity strategy at Standard Bank, said in a note, reports Tatyana Shumsky for The Wall Street Journal.

  • Powershares DB Precious Metals Fund (NYSEArca: DBP)
  • SPDR Gold Shares (NYSEArca: GLD)
  • iShares Silver Trust (NYSEArca: SLV)

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Powershares DB Precious Metals Fund

Full disclosure: Tom Lydon’s clients own GLD and SLV.

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.

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