Gold ETFs Hold The “Greece,” Fed Accountable (GLD, IAU, SGOL)
Gold ETF prices rise and hold the “Greece” and Fed accountable
Gold prices and Gold ETFs surged today on continued Greece debt problems and Dr. Bernanke’s testimony to the Senate Budget Committee. Greece has postponed its meetings on its debt resolution plan with the EU for yet another day, while Dr. Bernanke has promised Congress that he will do all he can to protect the US Economy from European economic contagion. Dr. Bernanke also commented on the recent jobs report last Friday, indicating that the US economy is still fragile.
Gold prices and Gold ETFs held the “Greece” and Fed accountable today as the gold spot price increased 1.39% to close out at $1752.60 per ounce, while gold ETFs including the SPDR Gold Shares Trust ETF (NYSEARCA:GLD), the iShares Gold Shares Trust ETF (NYSEARCA:IAU), and the ETFS Gold Shares Trust ETF (NYSEARCA:SGOL) all rose nearly 1.5% each.
Typically gold and gold ETFs are seen as a “safe haven” and an inflation hedge against currencies, and with Greece dragging its feet and the Fed’s promises of safety, investors likely saw the Euro and US dollar becoming weaker and thus migrated to gold instead. If Greece does default and exit the Euro, the consequences would likely be catastrophic; therefore the fear Greece has generated this week was likely a large driver in rising gold prices. Likewise, anytime the Fed speaks about the economy, low interest rates, quantitative easing, or in today’s case, promises to “protect” the economy, the outcome tends to be weaker dollars, which is likely why investors invested in more gold today as well.
Gold ETF Summary:
- SPDR Gold Shares Trust ETF (NYSEARCA:GLD): +2.52 (1.51%)
- iShares Gold Shares Trust ETF (NSYEARCA:IAU): +0.25 (1.49%)
- ETFS Gold Shares Trust ETF (NYSEARCA:SGOL): +2.50 (1.47%)
Bottom Line: Gold prices and Gold ETFs likely rose today on continued fears surrounding Europe, Greece, and the US economies. Since Greece has still not finalized a debt deal, and Dr. Bernanke is vowing to protect the US economy despite any European contagion, it is understandable why investors have flocked to gold and gold ETFs today as a “safety” net and inflation hedge. If European volatility continues, gold prices and gold ETFs will likely continue to rise. If anything, gold and gold ETFs will hold Greece and the Fed accountable with weaker currencies by gold prices soaring through the roof.
Sign up for our free newsletter!
Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.
Related Posts
