Gold ETF Trusts Continue Winning Ways (GLD, IAU)
Christian Magoon: Gold ETF trust products finished Thursday in positive territory, continuing their ascent this week. The largest gold ETF, the SPDR Gold Trust (NYSEARCA:GLD) gained for the fourth straight session. Here’s the chart fromYahoo Finance showing the last five days of GLD’s performance.
What’s impressive about this recent run in GLD is that it began with the surprise weekend bailout with Spain and it continues to gain momentum heading for the dreaded elections in Greece this weekend. Recent performance in gold during the EU crisis flare ups has been less than stellar. The U.S. Dollar and Treasuries have been gaining while gold has been on the decline.
GOLD ETF INVESTORS WONDER “IS THIS TIME DIFFERENT?”
Perhaps “this time is different” as many believe the combination of the most recent flare up in Europe with poor U.S. economic data might nudge the Federal Reserve to release more liquidity in the markets. Already China introduced a quarter of one percent cut last week, India appears likely to do the same next week and the odds seem to be more in favor of the U.S. responding as well.
Don’t forget the beginning of the decline in gold this year occurred in late February as the FOMC made comments that squashed the hopes of those looking for a QE3 anytime soon. The slide in gold prices from that announcement wiped out the 10% gains gold had achieved in 2012 and at one point pushed gold into negative territory this year. Now it appears that perhaps this latest flareup might be attracting the speculative QE3 crowd that left gold in early March given the recent run up.
Gold ETF products that track physical gold have not only had a good week but a good month as well. They are now up 5% over the last month with the iShares Gold Trust (NYSEARCA:IAU) leading the pack. Here’s the performance snapshot from GoldETFs.biz.
Christian Magoon is Publisher of GoldETFs.biz and IndiaETFs.com. He is also CEO of Magoon Capital, a strategic consultant firm to asset managers. Christian Magoon is an ETF insider, having launched over 40 ETFs in the United States to date. A widely recognized thought leader on finance and market issues, Christian regularly contributes to many financial media outlets. Prior to forming Magoon Capital in 2010, Christian was President of Claymore Securities (now Guggenheim Investments), where he built one of the fastest growing and most innovative ETF businesses in the country, gathering more than $3 billion in AUM in three years. He launched more than 40 ETFs, introducing many “firsts” to the U.S. market, including the first Frontier Markets, Sector Rotation, Solar Energy, Timber, BRIC and suite of China focused ETFs. Christian consistently provides his industry insights and knowledge as a commentator in the U.S. media speaking publicly on macro investment issues and ETF related topics. Follow him on Twitter @ChristianMagoon. In 2008, he was named by Institutional Investor News as one of the five people to watch in the U.S. ETF marketplace. In 2011, Financial Planning magazine dubbed Christian an “ETF Pioneer.”