Seasonality and Fundamentals Converging on GLD
As globally diversified investors make their plans for the remainder of 2020, it has become clear that market seasonality and fundamental metrics are aligning on GLD, the SPDR Gold Trust ETF. A reliable long-term tactical strategy for gold investments, GLD presents a compelling alternative for those who seek capital appreciation as well as a hedge against inflation.
While short-term market movements are always hard to predict, long-term seasonality not only provides a strong foundation for GLD’s success, but also highlights advantageous points of entry for investors who use seasonality-driven new investment plans. Historically, gold prices have seen a strong correlation with the approach of the fall, as volumes typically climb in the most recent months of August and September. The increase in gold prices in the autumn, both during 2017 and 2016, appears to support this trend.
In addition to market seasonality, there are a number of fundamental and technical metrics that also lend to the strength of GLD as an investment option. The SPDR Gold Trust ETF also offers investors attractive liquidity and tax benefits that are generally associated with other gold-related ETFs. In addition, the gold futures market is currently at a three-month high due to an increase in demand for the metal. This is directly related to global uncertainties stemming from geopolitical tensions, the coronavirus pandemic, and other factors.
The convergence of seasonality and fundamentals on GLD is pushing the ETF higher, with the potential for a strong finish to 2020. With gold set to continue its ascent over the coming months, it is an ideal time for investors to consider long-term allocations to GLD. With exposure to the most reliable and efficient gold ETF option available, investors can benefit from a secure hedge of inflation and economic uncertainty, along with the liquidity and tax benefits of ETF trading.
