After wild swings, gold showed a strong rebound at the start of the fourth quarter. The fall in U.S. dollar and a decline in yields bolstered the demand for the yellow metal. Additionally, the demand for inflation hedge and growing recession fears are driving investors toward gold, as it is considered a safe haven.

As such, gold ETF rallied over the past week with GraniteShares Gold Trust BAR, iShares Gold Trust IAU, SPDR Gold Shares GLD, iShares Gold Strategy ETF IAUF, and Aberdeen Standard Physical Swiss Gold Shares ETF SGOL gaining more than 3% each.

Factors Driving Gold Price

The combination of factors is acting as a catalyst for gold price. Wall Street was upbeat last week. The rally was mainly instigated by the lower-than-expected inflation data for the month of October. As U.S. treasury yields dropped last week, the greenback has lost 3.4%. The U.S. benchmark treasury yield started the month at 4.07%, hit a high of 4.22% and ended the week at 3.67%.

Traders expect the Fed to raise its benchmark lending rate in December but by a smaller margin of half a percentage point. If the pace of Fed rate hike slows, the U.S. dollar is likely to decline ahead. Invesco DB US Dollar Index Bullish Fund (UUP) is off 6% past month. If the greenback falls, gold prices will gain as the metal is priced in the U.S. dollar.

Moreover, ongoing geopolitical tensions in the East Europe may boost the safe-haven status of gold. Russia’s invasion of Ukraine has been escalating to accelerated levels of military action. Russian missiles now reportedly hit Poland. Concerns have arisen that because Poland is a member of NATO, the Russian missile strike could certainly risk the intensity of the war in Ukraine.

ETFs in Focus

Against this backdrop, investors can keep track of regular gold ETFs like SPDR Gold Shares (GLD), iShares Gold Trust (IAU), Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL), SPDR Gold MiniShares Trust (GLDM) and GraniteShares Gold Shares (BAR).

Bottom Line

Having said this, we would like to note that the current scenario is not in favor of gold investing fully as the greenback is in decent shape. Gold investors should closely watch the economic and market events before taking any decision.

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SPDR Gold Shares (GLD): ETF Research Reports
 
iShares Gold Trust (IAU): ETF Research Reports
 
abrdn Physical Gold Shares ETF (SGOL): ETF Research Reports
 
GraniteShares Gold Trust (BAR): ETF Research Reports
 
iShares Gold Strategy ETF (IAUF): ETF Research Reports
 
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