other developed economies are enacting looser monetary policies. For instance, the Bank of Japan is implementing policies centered on a weaker yen, and the stubbornly low inflation rate in the Eurozone leaves the European Central Bank more room for stimulus measures.
Additionally, the Swiss National Bank is racing the ECB to the bottom, purchasing euros to defend its franc currency. Switzerland relies on its export industries, so the country has been depreciating its currency in response to heavy safe-haven demand. [Dollar ETFs Can do it Again in 2015]
The PowerShares DB U.S. Dollar Index Bullish Fund (NYSEArca: UUP) has been almost perfectly inversely correlated to GLD. Over the past six months UUP is up 11.6% while GLD is down 11.2%. Year-to-date, UUP has added $208.5 million in new assets, a total surpassed by just eight other PowerShares ETFs.
SPDR Gold Shares
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of GLD.