Gold exchange traded funds (ETFs) which had declined after President Obama announced that his support for the proposal to bring down the deficit, bounced back on data from the National Association of Realtors (NAR) which revealed that the single family existing homes sales fell in June.
Optimism about the proposal to increase the government’s debt ceiling caused the SPDR Gold ETF (SPDR Gold ETF is the biggest gold ETF which is physically backed) to decline in the pre-market trade. The stock went down by about 0.7 per cent on the news of the meeting in Brussels of European heads to cobble together a deal to bailout Greece as well as contain the problem from spreading to other countries.
The plan that the US President has approved is to bring down the deficit of almost $4 trillion as the last date on the debt ceiling approaches. President Obama said that he approved the plan by his advisors and said that it was consistent with his thinking.
Gold ETFs such as SPDR Gold Trust went down by more than 1 per cent on this news. However, ETFs which are into US Treasury bonds went up by 1 per cent hoping that a timely compromise would be reached on the debt ceiling.
Gold ETFs went up after the report from the NAR said that the sales of existing homes dipped to the lowest in seven months. NAR said that the lower sales were because of a large number of cancellation and the poor economic conditions.
Investment in Gold ETFs is shining now as the precious metal has been gaining through this month as the debt-deficit problems in Europe and the US evade resolution. Gold prices went by $103 an ounce from the beginning of this month and by $197.50 an ounce from January 1 when the gold price was ruling at $1388.50