Gold exchange traded funds were set to rise for the fourth straight session on Thursday and the precious metal ETFs are attempting to retake the 200-day exponential moving average, a key technical indicator.
Indeed, ETFs indexed to gold prices are off to a strong start in 2012. While gold is still about $300 an ounce lower than the record highs from the summer, fundamental factors may still support gold’s investment appeal, including worries over additional money printing from central banks and, of course, Europe’s debt crisis.
SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) were all up about 0.6% on Thursday.
In 2011, gold prices hit a record high of $1,920 an ounce before ending the year at $1,550. However, gold regained its $1,600 foothold on the first trading day of the year. [Precious Metals, Miner ETFs Off to Strong Start]
There are still many bullish signals in gold’s favor. Inflation is still a key threat, notes Matthew Lynn for MarketWatch. Central banks have enacted loose monetary policies after the financial crisis, pumping the global economy with billions of dollars.
Despite the recent rally in the U.S. dollar, there are also concerns about the dollar losing its appeal as the world’s reserve currency.