Gold’s Irresistible Forces [SPDR Gold Trust (ETF)(NYSEARCA:GLD)]

most of the gold that the funds sold, and doesn’t seem eager to give it back.

But ETF selling has slowed to a trickle. Gold ETF outflows slowed 76% from December to January, according to data from ETF Securities.

What’s more, the end of January saw gold ETFs experience their largest inflows in a year.

It’s still early in the year, but if the funds are done hemorrhaging yellow metal, that lifts a huge weight off the market price.

Yellen Puts Wings on Gold

New Federal Reserve Chairwoman Janet Yellen appears for the moment to be following the easy-money path laid by predecessor Ben Bernanke. And that’s good news for gold.

Although she said tapering of the bond-buying program is likely to continue, she also signaled there is no preset course for the scale-back of quantitative easing. That statement helped gold rally this week.

India May Lift Restrictions on Gold Imports

Last year, India’s gold imports soared. In fact, the trend was blamed for pushing India’s current account deficit to a record.

So the Indian government hiked duties on gold imports three times last year, to a record 10%. It also dictated that a fifth of all imports of gold be shipped out.

Since India was 20% of global demand in 2012, these actions pushed gold prices lower last year. Indian gold imports probably fell 70% in the final quarter of 2013.

These policies have reduced India’s current account deficit, as intended. But it’s also ruining India’s jewelry business.

Many experts expect India to ease restrictions on imports after the official current account deficit is released next month. br>

There are other forces at work, including a potential strike at gold mines in South Africa and booming gold coin sales in the U.S.

Could gold prices go lower? Yes. But it darned sure looks like the bottom is in. If that’s the case, gold miners, which have been beaten into the dirt, are now bargains.

All the best,

by Sean Brodrick, Resource Strategist, The Oxford Club

Investment U provides cutting-edge research and strategic financial recommendations for all levels of investors through its morning publication Investment U Daily and its related publications.


Related ETFs:

 

(GLD) SPDR Gold Shares ETF 

Description:SPDR Gold Shares is an investment fund incorporated in the USA. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion less the Trust’s expenses. The Trust holds gold and is expected from time to time to issue Baskets in exchange for deposits of gold and to distribute gold in connection with redemptions of Baskets. SPDR Gold Trust (ETF)(NYSEARCA:GLD)

(SGOL) ETFS Physical Swiss Gold Shares ETF   

Description:ETFS Gold Trust is an exchange traded fund incorporated in the USA. The trust issues ETFS Physical Swiss Gold Shares to track the performance of the gold bullion spot price less the expenses of the Trust’s operations. The shares are backed by the physical gold held in Zurich Switzerland vault. The security only holds LBMA Good Delivery bars. ETFS Gold Trust(NYSEARCA:SGOL)

(AGOL) ETFS Physical Asian Gold Shares ETF  

Description:ETFs Asian Gold Trust is a Trust incorporated in the USA. The Trust seeks to reflect the performance of gold bullion. ETFS Asian Gold Trust(NYSEARCA:AGOL)

(IAU) iShares COMEX Gold Trust ETF 

Description:iShares Gold Trust is an investment fund incorporated in the USA. The Fund issues shares representing fractional undivided beneficial interests in its net assets. The assets of the Trust will consist primarily of gold held by the custodian on behalf of the Trust. iShares Gold Trust(ETF)(NYSEARCA:IAU)

(DGL) Powershares DB Gold Fund ETF   

Description:PowerShares DB Gold Fund is an exchange-traded fund incorporated in the USA. The Fund’s objective is to track the DBIQ Optimum Yield Gold Index Excess Return. PowerShares DB Gold Fund (ETF)(NYSEARCA:DGL)

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