Chart of the week: gold loses its lustre
The amount of cash invested in America’s biggest gold-backed exchange-traded find, the SPDR Gold ETF, is a stark illustration of investors’ growing disenchantment with gold.
The price of gold has slid to around $1,050 an ounce, its lowest level since February 2010. Gold pays no interest, and so tends to fall if interest rates on other assets are expected to rise.
The slide in the amount of cash invested in America's biggest gold-backed exchange-traded find (ETF), SPDR Gold ETF, is a stark illustration of investors' growing disenchantment with gold. On the other hand, with gold this out of favour, there should be scope for a decent bounce if sentiment changes and people rush back in.
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In light of ongoing concerns about financial markets, we'd still suggest owning some gold as portfolio insurance.
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