Looking ahead, we will have to weigh short-term volatility against long-term fundamentals. Rising government debt, weaker U.S. dollar, eventual inflation and even greater demand for the quickly rising middle class in the emerging markets will help bolster gold prices. However, we may see a repeat of last year’s U.S. debt drama. [Gold ETFs Look Good, At Least for Now]
“All the uncertainty in the metals markets with the government shut down, widely expected [quantitative-easing] tapering by the Fed (and then not tapering when push came to shove), distortion in the U.S. dollar, and now the threat of another debt ceiling comedy of errors … has caused further volatility,” Adam Koos, president of Libertas Wealth Management Group, said in the article.
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Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of GLD.