Gold ETF Rally can Keep Going

  • GLD, world’s largest physically-backed gold EFT, up more than 16% year-to-date
  • Gold’s blistering start to 2016 may be just the beginning, says Taurus Wealth Advisors Pte
  • Forecasts predict a move to the $1,400 to $1,450 per troy ounce area for gold this year

The SPDR Gold Shares (NYSEArca: GLD), the world’s largest physically-backed gold ETF, is up more than 16% year-to-date, making it one of the best-performing non-leveraged exchange traded funds this year. Even with that impressive performance in a small window, it is possible that the yellow metal and ETFs like GLD can keep soaring.

Gold prices strengthened this year as market volatility triggered safe-haven demand. Nevertheless, more long-term investors who are seeking insurance through a gold play should not throw everything into the precious metal. A portfolio allocation of about 5% is adequate for a partial hedge against any more trouble ahead.

“Gold’s blistering start to 2016 may be just the beginning, according to Taurus Wealth Advisors Pte, which says bullion may prove to be this year’s best performing asset as central banks exhaust their firepower,” according to Bloomberg.

Advisors and technical analysts are forecasting a move to the $1,400 to $1,450 per troy ounce area for gold this year, which implies significant upside from current levels.

“There’s a high probability the metal may surge to $1,350-to-$1,400 an ounce by the year-end, said Rainer Michael Preiss, a strategist at Singapore-based Taurus, a multi-family office with $1.4 billion under management. A rally to $1,400 needs a 13 percent gain from Monday, or 32 percent over the year,” adds Bloomberg.

“According to Mark Newton, principal at Newton Advisors, the metal could soon be trading at prices not seen in two years. Looking at a chart of gold going back to 2014, Newton sees bullion prices breaking well above a significant trend line in place for over a year as a result of a dropping interest rates and a falling U.S. dollar,” reports Yahoo Finance.