Gold bullion and commodity-related exchange traded funds surged to a 15-month high Friday on a depreciating U.S. dollar, along with rising risk-off sentiment with a equity market pullback.
The SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) rose 1.8% Friday as Comex gold futures gained 1.9% to $1,291 per ounce, their highest level since January 2015. Gold has been among the best performing assets this year, with three related ETFs increasing about 19.5% year-to-date.
Meanwhile, gold miners were outperforming on the continued rally in bullion. on Friday, the Global X Gold Explorers ETF (NYSEArca: GLDX) gained 6.8%, iShares MSCI Global Gold Miners Fund (NYSEArca: RING) rose 5.0% and Market Vectors Gold Miners ETF (NYSEArca: GDX) advanced 4.8%.
Gold prices were strengthening on the weaker USD – a cheaper dollar makes gold more attractive to foreign investors and helps support the hard asset as a more stable store of wealth.
[related_stories]The U.S. Dollar Index (DXY), which tracks the greenback against a group of developed market currencies, dipped 0.6% to 93.2 on Friday.
“Gold has a nice tailwind at the moment with the dollar weak and equity markets teetering to the downside,” Michael Armbruster, principal and co-founder at Altavest, told MarketWatch.
The USD is weakening on Friday after the Bank of Japan surprised markets by keeping its monetary policy on hold Thursday, which sent the Japanese yen rallying.
“The big strengthening in the yen in the wake of the Bank of Japan meeting has hit the dollar, and the dollar has been punished across the board. That has played into the commodity space,” Richard Perry, analyst at Hantec Markets, told MarketWatch.
Want more Gold ETF news and analysis? Visit www.etftrends.com/gold
SPDR Gold Shares