It’s been a while, but gold buyers are back. The shiny metal saw gains for the third straight session, a buying spree that is being fueled in part by the sell-off in U.S. stocks, (^GSPC) according to long-time gold investor George Gero of RBC Wealth Management.
“We have seen interest rates back off largely as we have seen the stock market backing off. We finally had six out of seven sessions lower in stocks and people have started to look.”
Investors buying the SPDR Gold Fund, also known as the GLD, at current levels, may also be taking advantage of a 32% decline the precious metal has experienced over the past two years as the U.S. economy has rebounded.
Gero says the next catalyst for a near-term move in gold could potentially come from the FOMC minutes due at 2pm ET today but there are other events on the horizon that could give gold a boost.
“We are looking forward to mid-term elections in the United States that can cause some volatility in markets. It could make the Fed look at the markets if there is a change in the Senate or the Congress. We’ll see other countries' central banks looking very closely at what is happening in the United States. You have the holiday season upcoming where the jewelers typically like to buy.”
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