On the fundamental side, volatility in U.S. equities, concerns over the Greek debt situation in Europe and geopolitical risks in the Middle East are fueling bets on gold as a safe-haven asset. Additionally, the U.S. dollar has somewhat depreciated, propping up USD-denominated commodities.
“The negative impact of these factors on gold prices could be limited in 2015, however, as much of the impact from these issues already is baked into the price of gold,” according to the CPM Group, Mineweb reports. “In fact, any significant weakening of investor enthusiasm for U.S. stocks, or the dollar, could prove supportive of higher gold prices, the reverse of 2014’s trends.”
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Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of GLD.