Predictably, gold’s resurgence over the past several days has been accompanied by a pullback in the U.S. dollar. The PowerShares DB US Dollar Index Bullish Fund (NYSEArca: UUP) is off 1.1% over the past five days, a drop that coincides with the beleaguered euro entering a favorable period of seasonality. [Euro Could Betray Seasonal Trends]
Ahead of the Indian festival Diwali, which arrives later this month, strategists see that seasonal factor as unlikely to boost gold demand despite depressed prices. That would mean another month of gold betraying a favorable seasonal catalyst. The yellow metal tumbled in September, which is usually the best month of the year for gold prices. India is the world’s second-largest gold consumer after China.
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ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of GLD.