NEW YORK (
) -- A major gold ETF dumps 13 tons and
global debt fears
capped investors' risk appetite and spurred demand for safe haven assets like Treasuries and currencies. Typically gold is bought as a safe haven asset during times of economic crisis but currently the precious metal is trading as a risk asset in opposition to the U.S. dollar
Trade Gold's Volatility
Analysts are looking for bargain hunters to come into the gold market but the question is when. The most popular physically backed gold ETF,
SPDR Gold Shares
lost 13.72 tons in Tuesday session on high volume signifying a trend out of gold. But Nicholas Brooks, head of research and investment strategy for ETF Securities, believes that bargain hunters are already coming into the market.
He reports that their physically backed ETF,
ETFS Gold Trust
, is actually seeing heavy inflows. "Whether it's because the gold is held in Switzerland or for other reasons...but basically we have been seeing strong flows on that front." Nick believes investors are still bullish on gold for the long term even if gold continues to correct. "
Medium to long term investors are concerned about growing government debt....for the traders....it's a combination of factors. Many of them are looking at what's going on with the dollar...and they tend to be very trend following."
Gold prices were relatively flat at $1,142.50 an ounce at the Comex division of the New York Mercantile Exchange. Gold delivery for February, the most actively traded contract, has traded as high as $1,145.90 and as low as $1,126.50. Gold was finding some support in a weaker U.S. dollar. The
was lower by .05% to $76.16.
Silver prices were sinking 14 cents to $17.66 while copper was flat at $3.15.
In mining stocks, a more leveraged way to
was rising 1.43% to $41.09 while
was adding 1.17% to $50.92. Share of
Freeport McMoran Copper & Gold
were relatively unchanged at $76.87 while
was rising 1.31% to $19.39.
Shares of the GLD were trading flat at $111.70 while shares of the SGOL were trading slightly higher at $113.70.
Market Vectors Gold Miners
Market Vectors Juniors
were up 1% to $48.14 and $25.74 respectively.
Written by Alix Steel in New York