Direxion Shares Exchange Traded Fund Trust had a pleasant trading session yesterday when it closed with gains of 0.37% at $2.68. The ETF is already up another 1.12% to a $2.70 trading price in pre-market trading today. The gains recorded in pre-market trading mimics the situation in the old world as gold prices opened higher in the London spot market earlier today.
The Wall Street Journal reports that the price of the yellow metal is on an increase today as the Federal Reserve makes it clearer that it is not likely to raise U.S. interest rates in September. The Federal Reserve Bank of New York, President William Dudley in a statement yesterday said that the feds now has a “less compelling” reason to raise interest rates in September.
Analysts doubtful about strength of the rally
News about when the Federal Reserve is likely to raise interest rates has been one of the factors affecting the flow and ebb of gold ETFs. Its recent effect on the Direxion Shares Exchange Traded Fund Trust happened mid-last week before the statement from the Federal Reserve on the state of the US economy.
The statement made by Dudley in addition to other insights on the likelihood of a September rate hike has eased the pressure on the bullion as the market breathes a sigh of relief. This morning spot gold was up 0.3% at $1,128.44 per troy ounce in European trade. However, much of the market believes that the gains recorded in the price of gold might be short-lived because the recent rally doesn’t have much of a fundamental support.
One of the analysts who are doubtful about the strength of the golden rally is William Adams, head of research at Fastmarkets. In a research note that he released to investors he said, “The dip in gold may well find support as there may be more market anguish ahead”.
An ANZ report also notes that the little gains being recorded in gold prices has not been enough to lure back many of the investors that ran for cover when the golden selloff started. The paper notes “Turmoil across global markets did little to bring people back to gold as investors ignored the metal’s haven appeal and focused on the prospect of higher U.S. interest rates.”
Some Nazi gold might have been found in Poland
On a slightly flippant note, it appears that treasure hunters and conspiracy theorists will be having a field day with the news that a Nazi gold trading has been “found” in Poland. The Telegraph reports that the reportedly found Nazi gold train is somewhere in the region of Walbrzych, a town in southern Poland. An official with the Poland’s culture ministry has added more credibility to the story, saying he is “convinced” of the existence of the train.
The jury is still out on whether the “found” Nazi gold train is a fact or a hoax. However, it is evident that the news will get people talking about the yellow metal. The buzz around the found train might increase interest in Direxion Shares Exchange Traded Fund Trust as gold continues to make headlines.