The SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) and other gold exchange traded products started 2016 with a bang, but are closing the year with a whimper.
Over the past month, the big-name gold ETFs have incurred double-digit losses and gold’s weakness over that span is prompting some analysts to lower their 2017 forecasts on the yellow metal. GLD and rival gold ETFs recently dealt with the Federal Reserve’s first interest rate hike of 2016 and now face the specter of up to three more rate increases next year.
Investors widely expected gold to rally if Republican Donald Trump won the presidential election earlier this month, which he did, but that thesis proved incorrect. Democratic challenger Hillary Clinton may have actually been the preferred victor for gold ETFs because historical data suggest gold performs better when Democrats are in the White House.
Raymond James pared its 2017 gold outlook “by 11% from $1,400 a troy ounce to $1,250 a troy ounce, and lowered silver forecasts by 10% to $18 a troy ounce,” reports Johanna Bennett for Barron’s.
There are avenues for those looking to profit from more downside in gold. For instance, the ProShares UltraShort Gold (NYSEArca: GLL) provides a two times inverse or -200% daily performance of gold bullion.