ETF Trends
ETF Trends

Gold bullion prices and related exchange traded funds have dipped to five-year lows, and some of the largest consumers of the precious metal are waiting on even lower prices.

Over the past month, the SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) have declined about 8.5%.

COMEX gold futures were trading at around $1,092 per ounce late Wednesday. The precious metal is stuck in its worst streak of losses since 1996 as investors dump commodities ahead of a Federal Reserve interest rate hike later this year.

Bullion dipped to $1,086.2 Monday, and Jeffrey Currie, Goldman Sachs’ head of commodities research, warned that prices could fall below $1,000 per ounce for the first time since 2009, reports Swansy Afonso for Bloomberg.

While Asia has been there to pick up the slack during prior periods of low gold prices, Howie Lee, an analyst at Phillip Futures Pte., argues that there won’t be much demand from bargain hunters this time around. Asian consumers may remain more reserved after the collapse in Chinese equities and weak monsoon rains in India.

Additionally, Mehul Choksi, chairman of Gitanjali Gems Ltd., India’s biggest diamond and gold jewelry retailer, believes buyers in India, the world’s second largest consumer of gold, are waiting on greater price stability before buying the metal.

“There hasn’t been any rush to buy and people will wait 15 to 20 days to see how prices behave,” Choksi told Bloomberg.. “It’s the lean season for demand. For gold, the real demand will start from August-September onwards with the start of the marriage and festival season.”

According to the World Gold Council, India imported 891.5 tons of gold last year while demand was 811.1 metric tons. The council believes consumption will increase to between 900 tons and 1,000 tons this year.

SPDR Gold Shares

For more information on the bullion, visit our gold category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.