Gold bullion and related exchange traded funds have been moving on safe-haven investment interest, but the next round of price appreciation could come from demand for the physical commodity.
Bullion-backed ETFs such as SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) have been losing strength over the past month but still gained almost 6% year-to-date. [Gold ETFs Recover on Fed Dovish Comments]
Fund managers, though, believe these gold ETFs could attract even more attention heading into Akshaya Tritiya, a Hindu holy holiday that falls on April 24 this year and one of the biggest gold buying festivals, reports Tapash Talukdar for the Economic Times.
Akshaya Tritiya is traditionally a day that is believed to bring good luck and success. Those who provide charity on this day are said to be blessed. Accordingly, many people purchase jewelry on this holy day.
“Demand is going at reasonable pace as restocking at jewellers level has started just before Akshaya Tritiya,” said a dealer with a private bullion importing bank in Mumbai, according to a Reuters report.
Additionally, the ongoing wedding season, which is now at is peak, in India has also helped prop up gold prices.
“There has been a growing interest among investors in gold ETFs, which is reflected in the steady growth in volumes. The traction is even more around days like Akshaya Tritiya and Dhanteras. We have been trying to create more awareness on the advantages of the product by continuously engaging with investors and market intermediaries,” Ravi Varanasi, head of Business Excellence at NSE, said in the Economic Times article.
“The demand for ETFs is quite high due to growing awareness. A lot of new investors are waiting to invest in ETFs which will push the overall growth ,” Nitin Rakesh, MD & CEO of Motilal Oswal Asset Management Company, said.
SPDR Gold Shares
For more information on gold, visit our gold category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD.