Gold exchange traded funds are rallying back after getting hit with several nasty sell-offs in the back half of 2011.
However, the ETFs’ 50-day exponential moving average looks to be a key hurdle the gold funds need to overcome before pushing even higher.
Gold’s foray below $1,600 an ounce brought out value hunters who believe the metal’s historic bull run is intact. [Precious metals, Miners ETFs Off to a Strong Start]
SPDR Gold Shares (NYSEArca: GLD) was little changed last week and lost ground Friday on European downgrade rumors.
The iShares Silver ETF (NYSEArca: SLV) posted a nice weekly gain as silver prices managed a run above $30 an ounce. Silver tends to display higher volatility than gold prices and is also more linked to the global economy due to silver’s wider industrial uses. [Silver ETFs Give it All Back]
“When people see dips in silver, they are going to get in,” Terry Hanlon, President of Dillon Gage Metals, in a Bloomberg report. “There are more fund managers who are pulling out of the ETFs and buying physical metals, which is a new trend. They want a product they can liquidate quickly and in increments they want. People do feel comfortable being in control over storing the product.” [Could Gold ETFs Worsen a Price Decline?]
SPDR Gold Shares
Tisha Guerrero contributed to this article.
Full disclosures: Tom Lydon’s clients own GLD and SLV. John Spence owns ZSL.
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.