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Gold ETF (AAAU) Hits New 52-Week High
For investors seeking momentum, GS Physical Gold ETF (AAAU) is probably on the radar. The fund just hit a 52-week high and is up 34.28% from its 52-week low price of $17.97/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
AAAU in Focus
The fund seeks to reflect the performance of the price of gold less the expenses. The product charges 18 bps in annual fees (See: All Precious Metals ETFs).
Why the Move?
Gold has been an area to watch lately, given the surge in the price of the yellow metal. The increasing probability that the Fed might start cutting interest rates in September is driving the upside in gold prices. Gold prices are inversely related to the value of the greenback as gold is priced in dollars. If the Fed goes ahead with a rate cut it will result in the value of the dollar to depreciate. A weaker U.S. dollar generally leads to higher demand for gold.
Considered a store of wealth and a safe-haven investment, prevailing geopolitical tensions and economic uncertainties further support the upside in the yellow metal.
More Gains Ahead?
Currently, AAAU has a Zacks ETF Rank #3 (Hold). However, it might continue its strong performance in the near term, with a positive weighted alpha of 26.12 (as per Barchart.com), which gives cues of a further rally.