Fed Comments Dent Gold Mining ETF

GLD is now trading below its year-to-date breakeven mark

Jake Scott

Deputy Editor

Mar 7, 2023 at 12:25 PM

Gold mining exchange traded fund (ETF) SPDR Gold Shares (GLD) is pulling back, after Federal Reserve Chairman Jerome Powell told the Senate banking panel that more interest rate hikes are needed in order to tame inflation.

Last seen down 1.4% to trade at $169.20, today's pullback has GLD trading back below its 80-day moving average. After last week snapping a five-week losing streak, the shares are now trading just below their year-to-date breakeven mark, and now stand 9.3% lower over the last 12 months.

GLD Chart March 72023

Now could be a good time to speculate on the security's next move with options, as premiums are attractively priced. This is per the ETF's Schaeffer's Volatility Index (SVI) of 14%, which ranks at the low 5th percentile of readings from the last 12 months.

Furthermore, the security's Schaeffer's Volatility Scorecard (SVS) of 72 out of 100 means GLD has exceeded option traders' volatility expectations over the past year.

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