Some gold traders argue that loose monetary policies overseas, such as in Europe and Japan, are stoking inflationary pressures. Consequently, overseas traders could be loading up on gold as well to help maintain wealth if consumer prices were to surge or their respective currencies begin to lose value.
Traders are also showing more bullish bets on gold. The number of net bullish trades on the precious metal rose to an 11-week high on May 10, but slightly dipped the week ended May 26.
However, some bullion strategists warn that a strengthening U.S. dollar could cap gold gains. ETF investors, though, can utilize euro- and yen-denominated gold ETFs to capture bullion moves while the dollar strengthens. The AdvisorShares Gartman Gold/Euro ETF (NYSEArca: GEUR) is an actively managed ETF that tracks gold in euro terms. The AdvisorShares Gartman Gold/Yen ETF (NYSEArca: GYEN) tracks gold in yen terms. [Euro-Denominated Gold ETF Shines in Commodity Space]
SPDR Gold Shares
For more information on the gold market, visit our gold category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of GLD.