For investors seeking momentum, the SPDR Long Dollar Gold Trust GLDW is probably on radar. The fund just hit a 52 week-high and shares of GLDW are up roughly 14.1% from their 52-week low price of $113.95/share.
But could more gains be in store for this ETF? Let’s take a quick look at the fund and the near-term outlook to get a better idea on where it might be headed:
GLDW in Focus
The fund tracks the Solactive GLD (NYSE:GLD) Long USD Gold Index, representing the daily performance of a long position in physical gold and a short position in the basket comprising euro, Japanese yen, British pound sterling, Canadian dollar, Swedish krona and Swiss franc. It charges 50 bps as annual fees (see:all the Precious Metals ETFs here).
Why the move?
The Fed kept the policy rate unchanged in the Jan 29-30 meet and is likely to be patient with further rate hikes, which led to a fall in greenback against the basket of major currencies. This increased the attractiveness of the non-yielding gold bullion whose prices generally follow an opposite trend in comparison to the U.S. dollar. Moreover, easing global economic growth is making investors flock toward safe haven assets.
More Gains Ahead?
Currently, GLDW has a high positive weighted alpha of 9.85, indicating outperformance in the days ahead. However, a moderate 20-day Historical Volatility of 6.33% asks for vigilance on part of investors.
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Zacks Investment Research