Gold ETFs Rally Again, Hit 3-Month Highs

It was another rough day for stocks on Friday, Oct. 26, but gold’s safe-haven status was on display as several bullion-backed ETFs posted solid gains.

Gold exchange traded funds, such as the SPDR Gold Shares (NYSEArca: GLD), are enjoy small resurgences in October and those gains were boosted Friday as the yellow metal remained above $1,200 per ounce. GLD was one of nine gold ETFs to hit three-month highs on Friday.

The safe-haven status of gold, which has been questioned at various points this year, appears to have been renewed over the past couple of days amid heightened equity market volatility. The recent rally in gold comes amid extreme short positioning in the yellow metal and could force traders that short the yellow metal to cover those positions, likely adding to bullion’s near-term upside. Some market observers are forecasting more upside for gold as the fourth quarter moves along.

“Societe Generale is “cautiously bullish” on gold prices, looking for the metal to average $1,250 an ounce in the fourth quarter and $1,275 in the first quarter and for all of 2019,” reports Kitco News. “The bank released an updated forecast Thursday ahead of next week’s gathering of the London Bullion Market Association. The bank said its outlook has not changed materially since the one issued a month ago.”

Near-Term Views on Gold

Investors have turned to GLD as a quick and easy way to gain exposure to gold price movements as they hedge against market risks, help protect their purchasing power in times of inflationary pressures or capitalize on increasing demand from the emerging markets with a growing middle-income class.

“Gold has been back above $1,200 an ounce for the last two weeks, helped by safe-haven buying due to weakness in global equities and geopolitical tensions, said the report, written by metals analyst Robin Bhar,” according to Kitco.