Geopolitical Concerns Are Good News for Gold ETFs

“Indeed, the yield on the 10-year U.S. Treasury note fell to a five-month low on Wednesday, while the yield on the two-year note also declined, along with the value of the Udollar. Bullion is highly sensitive to U.S. interest rates, which raise the opportunity cost of holding nonyielding, dollar-denominated gold,” according to CNBC.

Investors are displaying some enthusiasm for gold ETFs. For example, SGOL has added nearly $5.6 million in new assets this year. GLD, the world’s largest gold ETF, has seen year-to-date inflows $874.2 million in new capital.

Gold prices could move modestly higher with some help from emerging markets, namely China and India. However, the dollar has recently retreated in noticeable fashion, helping aid gold’s ascent along the way.

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Tom Lydon’s clients own shares of GLD.