Gold and silver exchange traded funds opened the week with a rally after Greece missed goals on cutting its deficit.
The Greek government passed austerity measures over the weekend. Eurozone finance ministers were meeting later Monday to hold talks on the next steps to address the debt crisis, Reuters reported.
SPDR Gold Shares (NYSEArca: GLD) rose 2% before Monday’s opening bell, while iShares Silver Trust (NYSEArca: SLV) added 4.7% in premarket.
Gold was rising for the third straight day after posting its worst month in September since October 2008. Technical analysts are talking about a potential “double top” in gold, but ETFs could get a seasonal bounce in the fourth quarter. [Gold ETFs Look for Seasonal Bounce in Q4]
The gold ETF lost about 11% in September.
“After the recent washout, gold positioning is far from extended and this is quite a bullish signal for price strength ahead. The ‘clean’ nature of current spec positions, along with physical and long-term demand, is creating a very healthy foundation for gold to climb from,” said UBS analyst Edel Tully in a Reuters report.
Precious metals ETFs could see action this week as Federal Reserve Chairman Ben Bernanke speaks on Tuesday while later in the week markets will get an interest rate decision from the European Central Bank and U.S. nonfarm payrolls for September.
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD and SLV.