New data suggests that gold is on track to record one of its best annual performances, with investors increasingly showing an appetite for the yellow metal, as evidenced by trends in related exchange-traded funds (ETFs).
To recap, gold has rallied significantly, trading at a new all-time high above $2,600, with bulls anticipating further gains amid the ongoing conflict between Iran and Israel.
Analysis now indicates that gold ETFs, including those focusing on gold miners, have seen a significant uptick in investor interest, attracting $3.3 billion in inflows since mid-August, as shared by The Kobeissi Letter in an X post on October 2.
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A review of the inflows shows that the most popular ETF, SPDR Gold Shares (GLD), recorded $644 million in cumulative inflows in 2024. At the same time, miners’ ETFs, including VanEck Gold Miners ETF (GDX) and VanEck Junior Gold Miners ETF (GDXJ), have performed even better, up over 30% in 2024. If this trend is sustainable, these miners’ ETFs are poised for their best performance since 2020.
Indeed, this influx is not surprising considering gold’s long-standing role as a hedge during periods of uncertainty. The analysis noted that gold is on track for its best annual return since 1979, up 28% so far in 2024. These ETF inflows complement earlier reports indicating that hedge funds are bullish on gold, with some targeting a $3,000 price point.
“The most popular gold ETF, $GLD, has recorded $644 million cumulative inflows year-to-date. Historically high demand has put gold on track for its best annual return since 1979, up 28% year-to-date,” the platform noted.
Why gold is rallying
Beyond the escalating tensions in the Middle East, gold was already on an uptrend due to uncertainties surrounding the overall economic trajectory and lingering recession fears. The momentum in the precious metal accelerated after the Federal Reserve implemented an interest rate cut.
To put gold’s performance into perspective, 2024 returns have contributed to a 53% gain over the past three years, almost double the S&P 500’s return. Investors are now closely watching whether the metal will rally to a new record high of $3,000.
This bullish outlook is supported by an analysis by Gold Predictors. As reported by Finbold, analysts believe the metal has recorded numerous bullish forces since March, and recent consolidation has built a foundation for a potential rally.
Key gold prices to watch
However, it’s worth noting that gold has seen a short-term correction, losing about 0.5% in value over the last 24 hours and trading at $2,649 at the time of writing. Based on this price movement, an expert with the pseudonym GPT Profit Hunter, in an October 2 X post, suggested that gold’s one-hour chart is facing resistance around $2,670-$2,675.
He noted that investors should watch the support zone for around $2,645. However, he warned that the bullish momentum may be invalidated if gold closes below $2,640.
“Currently Gold at its support zone 2650$-2645$, where a trendline also aligns in the 1-hour chart. I’m anticipating a bullish move from this area, but if a candle closes below 2640, the setup becomes invalid,” he said.
On the other hand, not all analysts see gold’s rally as sustainable in the long term. Some believe the performance could signal a potential black swan event, such as a market crash.
Additionally, data suggests that the outcome of the upcoming U.S. election will play a key role in determining gold’s next trajectory, as the metal has historically performed differently under Republican or Democratic administrations
