Can This Gold ETF Stage a Fall Rally?

The news of a new trilateral trade deal between the United States, Canada, and Mexico brought down the spot price of gold below $1,200 on Monday, October 1. The iShares Gold Trust (TSX:IAU) ETF was down 0.26% in early afternoon trading on the same day.

U.S. indexes posted the most significant gains as markets opened on Monday. The U.S. dollar also received a boost along with its North American peers, which generated downward pressure on the yellow metal.

The U.S. Federal Reserve has seemingly made up its mind to accelerate rate hikes in what has been an improving economic environment. This news does not appear to bode well for gold in the near term.

However, there are worrying signs that could make a gold ETF a nice stash for the medium-to-long term. There are concerns that the winding down of monetary easing from central banks across the developed world could result in choppy market conditions and put a squeeze on investors.

The GOP tax reform bill has propelled corporate earnings in 2018, but the International Monetary Fund, World Bank, and even the U.S. Federal Reserve project growth to fall below 2% by the beginning of the next decade.

Gold has been a poor performer in 2018, but it will not hurt investors to hold a small interest in their portfolios as the final months of the year wind down. The iShares Gold Trust ETF provides some diversification and stability for those who still want the benefits of a safe haven without holding volatile equities or even physical gold.