Gold ETF (AAAU) Hits New 52-Week High

For investors seeking momentum, Goldman Sachs Physical Gold ETF AAAU is probably on the radar. The fund just hit a 52-week high and is up 39.27% from its 52-week low price of $19.15/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, driven by the Fed’s rate cut in September, the first in four years. Gold prices are inversely related to the value of the greenback as gold is priced in dollars. A rate cut by the Fed will result in the depreciation of the value of the dollar. A weaker U.S. dollar generally leads to higher demand for gold as it becomesmore affordable for buyers holding other currencies. The likelihood of further interest rate cuts toward the end of 2024 is also a tailwind.

The yellow metal is considered a store of wealth and a safe-haven investment. Escalating geopolitical tensions in the Middle East and rising economic uncertainties due to the upcoming U.S. Presidential elections should further support its upside.

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 38.14 (as per Barchart.com), which gives cues of a further rally.

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