ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Alternatives Channel
  2. Investors Benefit From Gold Defiance
Alternatives Channel
Share

Investors Benefit From Gold Defiance

Tom LydonJan 27, 2023
2023-01-27

As measured by the SPDR Gold Shares ETF (GLD A-), the largest bullion-backed exchange traded fund, gold is off to a strong start in 2023. GLD is higher by 5.79% as of January 26.

That’s after gold disappointed a bit last year, declining despite soaring inflation, though the yellow metal did outperform broader equity and fixed income benchmarks. However, some market observers pointed out that inflation could prove to be longer-lasting than expected due to shifts in the labor force. That could force the Federal Reserve’s hand to raise interest rates, which is a drag on gold.

“Evidently, inflation has peaked. But when you talk to the smartest economists out there, what they’re really looking at is specifically core inflation in the service sector, which tends to be supported by wages,” noted Daniel Ghali, a senior commodity strategist at TD Securities. "And what’s different this cycle is that we have a ton of baby boomers that are retiring early. And that’s keeping the labor market structurally tight, which should keep service sector inflation sticky, and in turn, will be a constraint on the Fed to cut rates. That’s really the bearish macro driver for gold.”

Ghali went on to note that data indicate that professional traders aren’t rushing to get into gold, begging the question of who’s currently buying large enough quantities of bullion to move the price higher. The answer could be global central banks and Chinese and Indian investors, among others.

“So that begs the question, who exactly is buying? And I think there’s a lot of evidence of substantial purchases from Chinese participants, both central bank and non-central bank official sectors, who are buying gold at a massive scale. And that’s really the primary reason why gold prices have rallied in the New Year,” added the strategist.

In the U.S., ETF investors are displaying enthusiasm for gold, albeit in modest fashion, as three of the largest gold ETFs, including GLD, have taken in almost $700 million in new assets since the start of the year.

Those are positive signs, and while it’s possible that gold jumps to $2,000 per troy ounce later in 2023, it’s also possible that a retreat arrives first.

“I mean, it’s obviously possible that we’re going to break $2,000 at some point this year. But I would argue that the rally we’ve seen is probably not what’s going to lead to that breakout. And instead, we’re more likely to see a pullback in gold,” concluded Ghali.

For more news, information, and analysis, visit the Alternatives Channel.

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X