Gold ETFs Continue Surge For Strong Week (GLD, IAU, GDX, UGL)
Gold ETFs continued their surge today to finish out a strong week
Gold and Gold ETFs have risen to their 4th straight week of gains as lackluster GDP growth and Fed actions earlier this week likely spurred the gold bugs to buy the precious metal. The Gold spot price increased .79% to close at $1733.50 per ounce, the gold spot price is almost to its early December high of just over $1760 per ounce before its large crash and burn at the end of 2011.
Gold ETFs including the SPDR Gold Trust ETF (NYSEARCA:GLD), the iShares Gold Trust ETF (NYSEARCA:IAU), the Market Vectors Gold Miners Trust ETF (NYSEARCA:GDX) and the ProShares Ultra Gold ETF (NYSEARCA:UGL) have all risen over 1% today, with the the Gold miners ETF (NYSEARCA:GDX) and Ultra Gold ETF (NYSEARCA:UGL) rising over 2% today.
The continued surge in gold prices and gold ETFs is likely due to lackluster GDP growth and the Fed’s committment to near zero interest rates until 2014. Typically gold prices rise as economic conditions fall or falter; today’s 4th quarter GDP 2.7% growth report was certainly nothing to write home about and is certainly indicative of a fragile recovery that is also influenced by a struggling Europe. Gold also tends to be viewed as a good inflation hedge and a “safe haven” currency when US dollars, for example become weaker. The Fed’s actions likely will weaken the dollar and thus increase inflation, thus investors have been fleeing back to gold in recent days.
Gold ETF Summary:
- SPDR Gold Trust ETF (NYSEARCA:GLD): +1.70 (1.02%)
- iShares Gold Trust ETF (NYSEARCA:IAU): +0.18 (1.07%)
- Market Vectors Gold Miners Trust ETF (NYSEARCA:GDX): +1.38 (2.47%)
- ProShares Ultra Gold ETF (NYSEARCA:UGL): +1.98 (2.08%)
Bottom Line: Gold prices and Gold ETFs have been popping lately as the 4th quarter GDP report was weak and the Fed has guaranteed near zero interest rates, both events of which have sparked a migration to gold and other precious metals as a “safe haven” and inflation guard. Although gold prices have not yet reached their early December highs, it is quite possible that they can given this last week’s past events. However keep in mind that what goes up must eventually come down, especially if Europe resolves its issues and the US economy starts to boom again. Both the US and Europe have a long way to go, however remember the gold price crash in December once Europe temporarily fixed its problems for Christmas. Enjoy the profits now!
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Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.
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