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Gold ETFs May Continue to Shine in 2012

Gold has started the New Year on an excellent note, reaching its one month high, though well off of its August 2011 high of ~$1900 per ounce. Later last year, the yellow metal had lost some of its luster but still closed the year up, for the eleventh year in a row.

Short term factors that resulted in recent rally include rising appetite for gold in China, as the investors seek to protect their wealth against falling property prices and rising inflation. The demand in China is also usually highest before the Chinese Lunar New Year (beginning January 23). Consumer demand for gold improved in India in the last few weeks due to Indian currency’s rise against the dollar (making gold imports cheaper) and beginning of the wedding season.
Some of the factors that will likely support gold’s upward trend in 2012 are rising inflationary expectations and heightened macroeconomic uncertainty in many countries