Gold exchange traded products, including the SPDR Gold Shares (NYSEArca: GLD), iShares Gold Trust (NYSEArca: IAU) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL), have traded slightly lower to start May, but the yellow metal is coming off an interesting April.
Gold’s recent bullishness is impressive when considering that the Federal Reserve raised interest rates earlier this month, setting the stage for two more rate hikes later this year. However, the yellow metal has been boosted by the dollar’s disappointing showing this year.
In the face of a stronger dollar and speculation that the Federal Reserve could raise interest rates as many as three times this year, gold prices could move modestly higher with some help from emerging markets, namely China and India. France’s presidential election adds to the case for gold. The final round of France’s presidential election is May 7th.
Geopolitical uncertainty often stokes interest in gold and the related ETFs. However, a Le Pen loss in the French election next month could boost the euro against the dollar. That could be of some assistance to gold, which is denominated in dollars.