Gold Surges To 14-Month High: ETFs To Tap

Gold price climbed to more than $1,350 per ounce, touching a 14-month high and gaining for the fourth straight week — the longest run since January. Hopes of a Fed rates cut and investors’ flight to safety fueled by a myriad of woes fueled the rally in the metal.

The Fed early this month hinted at interest rates cut if needed, given the implications of trade tensions on the economy. Speculation increased all the more with the latest weak job data and subdued inflation. Lower rates will continue to weigh on the dollar against the basket of currencies, raising the yellow metal’s attractiveness as it does not pay interest like fixed-income assets (read: ETFs Set to Soar on Rate Cuts Signal).

Global growth worries driven by deepening U.S.-China trade tensions, disappointing economic data across the globe, and geopolitical tensions spurred demand for safe-haven assets. The attacks on two oil tankers in the Gulf of Oman sparked fresh concerns of U.S.-Iran conflict as Washington blamed Iran for attacks, while Tehran refused.

Further, factory activity contracted in the United States, Europe and Asia last month while China's industrial output growth slowed to a more than 17-year low of 5% in May. The World Bank recently slashed its global growth outlook from 2.9% projected in January to 2.6% -- the slowest growth in three years -- citing trade conflicts, financial strains and unexpectedly sharp slowdown in wealthier countries.

Against this backdrop, gold is considered a great store of value and hedge against market turmoil. Moreover, investors poured into exchange-traded funds backed by gold, with holdings rising to the highest since late February (read: Gold Close to Touching Six-Year High? Leveraged ETFs to Play).

ETFs to Tap

Given this, investors could tap the rise in bullion price with the help of ETFs. We have highlighted five gold ETFs that could be excellent plays for investors, who believe that gold will continue to move higher amid rocky fundamentals.

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