Gold has experienced a remarkable rally, surging from around $2,000 at the start of 2024 to over $5,600 earlier this year, making the SPDR Gold Shares ETF (GLD) one of the standout trades in the market. This surge has been fueled by persistent inflation since the COVID-19 pandemic and increased central bank purchases, particularly from the People’s Bank of China, as they seek to mitigate currency risk and bolster their reserves.
The SPDR Gold Shares ETF has seen its price rise from $166.84 five years ago to $433.25 as of April 24, yielding a total return of 159.7%—an impressive annualized return of 21%. With inflation in the U.S. remaining above 3% and central banks continuing to accumulate gold, the underlying factors driving this upward trend are still present.
For market professionals, the ongoing demand for gold as a safe-haven asset suggests that its bullish momentum may continue, especially if economic conditions worsen and investors seek to hedge against market volatility.
Source: fool.com