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.