Gold ETFs Look For Mean Reversion

Related: Can Gold Prices Reach $1,350 in Six Months?

Gold has enjoyed greater demand in a low interest-rate environment as the hard asset becomes more attractive to investors compared to yield-bearing assets. However, traders lose interest in gold when rates rise since the bullion does not produce a yield. Demand from international markets also figures prominently in the equation.

“Meanwhile, on the physical side, China and Hong Kong collectively have received the highest tonnage of total imports from Switzerland, (346 tons YTD) while India has received 290 tons in H1 2017 (note we don’t necessarily think that India will continue to import at this clip on a seasonally adjusted basis). Low prices this year have kept consumer interest alive, and we look forward to consumer demand figures for Q2 17 for signs of life,” according to the RBC note seen in Barron’s.

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Tom Lydon’s clients own shares of GLD.