Gold ETFs Are Entering a Seasonally Strong Period

Gold ETFs may continue to shine ahead as we enter a seasonally strong period for the precious metal during the latter months of the year.

Specifically, George Milling-Stanley, Head of Gold Strategy at State Street Global Advisors, pointed out the gold typically experiences seasonal strength starting in early weeks of October, based on buying for the Indian festival season, followed by the marriage season lasting until May or June. Additionally, jewelers typically stock up ahead of Chinese New Year, Christmas and Valentine’s Day.

“In fact, the period October to June is typically the strongest for overall gold demand,” Milling-Stanley told ETF Trends.

Gold prices have strengthened with Comex gold futures now trading at around $1,236 per ounce. The SPDR Gold Shares (NYSEArca: GLD), the largest gold-related ETF on the market, gained 2.4% over the past month.

“I believe the run is sustainable because of the seasonal patterns noted above, plus continued investment buying across the emerging world as their currencies weaken,” Milling-Stanley said. “In the West, we are seeing safe haven investment in gold, coupled with a longer-term trend toward strategic asset allocation investment by institutions and individuals.”