With U.S. stocks dropping Wednesday, following a wild ride last week and the week before, analysts are now seeing even more volatility throughout markets in the month of August.
Gold in particular has been having a stellar month, with the metal smashing through the $1,500 level, currently trading around $1,520, with safe-haven demand fueling trading to start the trading week, as protesting in Hong Kong escalated into riots over the weekend. The SPDR Gold Trust ETF (GLD) has been performing very well with all the geopolitical activity.
“Yeah gold is having a big move. If we look at a couple weeks ago, maybe six weeks ago, it was at $1400, and I think we’re on our way to $1,700. But the world looks like a mess. We’ve got lower yields which makes gold look more attractive we’ve got geopolitics, we’ve got what’s going on in India, which looks like it might be a side effect, and unintended consequence of of the US withdrawing troops from Afghanistan. My sense is that when the Chinese officials Call the protesters in Hong Kong Terrace it means their patience is running out. So I think we’re going to see something come to a climax around the corner—all up in Gold,” said Marc Chandler, chief market strategist and managing partner of Bannockburn Global Forex on CNBC.
Other analysts see a tumultuous August performance from the markets as well, with bond yields skidding, and no trade deal in sight.
“I think we can expect August to be pretty choppy from here. And continue to be very sensitive to headlines and concerns. I mean the 210 is still positive I think, last I looked, and that something that investors are going to be paying Very close attention to as we try to figure out if recession is in the near term cards,” said Nancy Tengler, chief investment strategist at Butcher Joseph Asset Management.
Fortunately, with volatility comes opportunity, for savvy investors willing to take on some additional risk in their portfolios.
“I think there’s always places you can look for opportunity. We talked a little bit earlier when Bob Pisani was here that the top down versus bottom up. Used at bottom of strategy but you have the fundamentals. Look in areas where stocks have come down. If there’s some upside potential there going forward and take a vantage of that. With all the stuff that’s down today it’s a pretty wide scope of where you can look,” said Victoria Fernandez, chief market strategist at Crossmark Global Investments.
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