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iShares Gold Trust - IAU - 05/09/2017

Short term strategy : Positive (100%) / trend +
Long term strategy : Positive (100%) / trend +

Characteristics of the ETF

IAU Gold trust is an ETF which allows investors to access a daily exposure to fluctuations in the price of Gold bullion, and represents an easy way for investing into physical Gold through a financial instrument both liquid and whose cost of access is limited (0.25% in the lower range of ETFs expenses).

Gold is usually not correlated to equity and bond markets and also serves historically as a safe haven particularly at times of high inflation and through financial crisis, as we have seen from the recent period  2007-2012 marked by the subprime crisis, followed by the crisis on the European peripheral debts.

Furthermore, gold is sensitive to other factors such as central bank purchases which is currently the case with significant inflows of foreign central banks in emerging countries such as China and India. The momentum in US interest rates is also very important for gold prices because this precious metals do not grant dividend or interests therefore the FED hike is a central issue for the gold price: If the FED does not accelerate the rate hike pace in the coming months, this should be beneficial for the gold price. However in case of inflationary spiral as in the 70's, the very strong rates is good news for gold as a safe haven.

Gold may also be seen as a diversification to an equity portfolio because the change of the metal is not correlated to economic cycles and may follow a very different path opposed to the trend of stocks but not necessarily.

Finally gold is denominated in US $, which may have a double effect because the dollar itself is seen as a safe haven and the dollar weakness tends to be positive for commodity prices.

Since the election of D.Trump, Gold corrected sharply because of higher long rates which makes it less attractive, while inflation expectations rise without worrying. Talk of embargo/quotas on india imports also weighted on prices at the end of 2016, while India is the biggest gold consumer especially for jewellery. But for the time being measured actions from the FED on rates and potential threats of trade war between China and the US (even with Germany and Japan), the consequences still underestimated Brexit debt as well as the very important largest economies – the United States, China, Japan, Europe) remain encouraging for gold prices. In the event of a slippage in inflation or conversely if a new crisis were to emerge on the horizon, gold would become again the natural safe haven for investors.

Since the beginning of the summer, growing tensions between the US and North Korea feed a new appetite for gold, which should accelerate in the wake of the recent nuclear test. In addition, the dollar is under pressure, due to the increasingly chaotic US domestic policy of Donald Trump and while the opposition of the congress is such, that the debt ceiling is not acquired, which would likely cause a serious crisis leading to a shutdown of the government and potentially a bond crisis.

Monthly data

Analysis of the monthly charts shows that gold is back in a long-term bullish pattern. All indicators are positive and the moving averages are ascending again, while the MACD has just passed the zero line. The next target is represented by the peak of summer 2016, which once overtaken will unleash a significant upside potential, namely the historic highs achieved in 2012/2013.

The momentum is in acceleration phase.


Weekly data

The weekly charts show a sharp upward acceleration in recent weeks but that will reach shortly  the 13$ resistance area, making it a key level. The oscillators are bullish without being overbought, which suggests a large upward potential if the resistance zone is exceeded.

ETF Objective

IAU, iShares Gold Trust seeks to reflect generally the performance of the price of gold

It can be used to diversify a portfolio and help protect against inflation


Inception date 21/01/2005
Expenses 0,25%
Issuer iShares
Benchmark LBMA Gold Price
code/ticker IAU
ISIN US4682851053
Currency USD ($)
Exchange NYSE/USA
Assets Under Management 9 277 M$
Dividend No
Noumber of Holdings 1
Risk 3/5

Country Breakdown


Sector Breakdown

Gold 100%

Top Ten Holdings

Gold 100%