As safe-haven GLD gains on rising Israel-Iran tensions, investors may try these defensive strategies to guard against market volatility.
The recent U.S. credit rating downgrade will likely have long-lasting effects on the dollar, making both GLD and IAU attractive. A weakening dollar and potential erosion of its reserve currency status could drive up gold prices as long as gold is priced in dollars. The downgrade could also encourage other countries to diversify their reserves away from the dollar and toward gold.
Gold is on track for its largest weekly gain in more than a month, thanks to growing investor concerns over the United States' ballooning fiscal deficit.
With progress in U.S.-China trade talks, safe-haven assets seem to have taken a back seat. However, the full effect of the tariffs may be delayed, keeping market volatility intact.
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The hedge fund billionaires listed below sold shares of Nvidia (NVDA 0.12%) during the fourth quarter, ahead of the recent stock market crash. They also purchased SPDR Gold Shares (GLD -0.97%), an exchange-traded fund that soared 166% in the last decade.
Wall Street's recent revival dulled gold's shine on cues of trade de-escalation. However, since volatility persists, it is better to play equities with a defensive approach.
After its best quarter since 1986, gold sits in overbought territory. Further upside looks unlikely.
The allure of gold's recent out performance is undeniable but the current technical indicators suggest that investors should not chase the shiny metal at these extended levels.
In the ever-changing world of investing, market volatility is one of the few constants. These good quality ETFs should help you weather market uncertainty if held for the long term.
Goldman Sachs has raised its year-end price forecast for safe-haven gold to $3700 per ounce, per Reuters.
In times of market volatility, such as the current U.S.-China trade war, gold serves as a reliable hedge, making SPDR Gold Shares ETF a strong portfolio addition. Historical data shows gold outperformed SPY during the 2018-2019 trade war, suggesting a repeat is possible with renewed trade tensions. Options market analysis indicates bullish momentum for GLD, with significant gamma exposure targeting $310-$330, supported by institutional buying in dark pools.