Gold ETFs have enjoyed strong demand this year on strengthening prices as investors look to safe-haven demand in response to a more volatile equity market.
The SPDR Gold Shares (NYSEArca: GLD) gained 3.6% year-to-date as gold prices recently touched a two-year high. GLD has also attracted $1 billion in net inflows so far this year.
George Milling-Stanley, Head of Gold Strategy at State Street Global Advisors, argued that this can be a great year for gold, especially after holding up in unfavorable conditions in 2017. Last year, the U.S. saw three rate hikes, none existent inflationary pressures and a bullish equity environment, which should have spelled trouble for gold, but the precious metal still managed a 13.5% gain for 2017.
Looking ahead, Milling-Stanley mentioned three or even four rate hikes that many have already priced in, positive inflation that could prop up hard asset buying and heightened equity market volatility.
“Gold has a nice track record in hedging volatility, excessive volatility in equities,” Milling-Stanley told ETF Trends in a call.
Looking ahead, Milling-Stanley projected gold prices to stay within the $1,350 to $1,400 range in 2018 with a support at $1,300.
“We are seeing good steady growth in the demand for gold, not just as investment, but we’ve got decent economic growth throughout the emerging world that is helping to support good solid jewelry demand,” he said.
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