The good news for gold ETFs is that inflation could serve as a catalyst for the yellow metal. Rising inflation could also prove to be a catalyst for gold ETFs. By some metrics, the Fed has under-estimated U.S. inflation, which could prove beneficial to gold because the yellow metal is historically a popular inflation fighter.
“Other bulls include billionaire Ray Dalio, who leads the world’s largest hedge fund at Bridgewater Associates. He’s recommended investors place as much as 10 percent of their assets in gold as a hedge against political and economic risks. Bullion could rise to $1,400 by early next year, buoyed by lower long-term U.S. interest rates and lack of progress by Trump in delivering economic reform, according to Bank of America Merrill Lynch,” according to Bloomberg.
Through Aug. 30, investors added over $1 billion to GLD, the largest gold ETF, last month. IAU saw August inflows of almost $250 million.
Tom Lydon’s clients own shares of GLD.