“Investors are beginning to put money into SPDR Gold Trust again, a fresh signal that demand for gold is picking up. Over the four weeks ended Feb 8, SPDR Gold Trust (GLD: 109.47 -0.51 -0.46%) had net inflows of $10.6 million, according to data provided by TrimTabs Investment Research. At the same time, bullion assets held by the world’s largest gold exchange-traded fund are gaining. SPDR Gold’s holdings rose by 3.04 metric tons (3.35 short tons) on Tuesday to 1,109.4 metric tons of gold, the second time this year those assets have increased. The trust purchases physical gold every time an investor buys a share in the ETF,” Liana B. Baker Reports From MarketWatch.
From a very broad standpoint, people are looking for other assets,” said Doug Keller, principal at Harvest Capital Services, a financial services consulting firm. “Money is coming into that ETF.”
Baker goes on to say, “This recent uptick in flows and assets, while modest, is a change from the declines the ETF experienced for most of this year as gold prices fell, the U.S. dollar stabilized, and investors raised cash, perhaps for tax purposes. For the entire month of January the fund had $776 million in net outflows, according to its Web site. So farthis year, gold assets held by the trust are down 24.22 tons, or 2.1%.”
Paul Justice, Morningstar’s associate director for ETF research, said he doesn’t expect investment in SPDR Gold Trust this year to match last year’s net inflows of $8.5 billion, an exceptional result. “Last year was tremendous for GLD and there was so much interest in it,” Justice said. “It wouldn’t shock me to see outflows in GLD this year.”
“With $39.7 billion in assets, SPDR Gold’s holdings dwarfs the gold stockpiles of many central banks, and some investors view them as a proxy for broader trends in gold. Shares of GLD fell 7% between Jan. 11 and February 5, but have slowly started to recover. The ETF’s share price is up 2.3% for the year so far,” Baker Reports.
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We have listed some options for investing in gold through ETFs below:
LONG:
The investment (GLD) seeks to replicate the performance, net of expenses, of the price of gold bullion. The trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. The gold held by the trust will only be sold on an as-needed basis to pay trust expenses, in the event the trust terminates and liquidates its assets, or as otherwise required by law or regulation.
The investment (GDX) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the AMEX Gold Miners index. The fund generally normally invests at least 80% of its total assets in common stocks and American depositary receipts (ADRs) of companies involved in the gold mining industry. The fund is nondiversified.
The Funds (GDXJ) investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Junior Gold Miners Index (the “Junior Gold Miners Index”). For a further description of the Junior Gold Miners Index, see “Junior Gold Miners Index.”
The objective of (SGOL) the newly listed shares is to reflect the performance of the price of Gold bullion, less the Trust’s operating expenses. The Trust is open ended and is designed for investors who want a cost-effective(1) and convenient(2) way to invest in Gold as well as diversify their Gold holdings.
The investment (UGL) will seek to replicate, net of expenses, twice the performance of gold bullion as measured by the U.S. Dollar p.m. fixing price for delivery in London. The fund normally invests assets in financial instruments with economic characteristics twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective.
The investment (DGL) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Liquid Commodity Index - Optimum Yield Gold Excess Return. The index is a rules-based index composed of futures contracts on gold and is intended to reflectthe performance of gold.
The investment (DGP) seeks to replicate, net of expenses, twice the daily performance of the Deutsche Bank Liquid Commodity index - Optimum Yield Gold Excess Return. The index is intended to reflect changes in the market value of certain gold futures contracts and is comprised of a single unfunded gold futures contract.
The objective (IAU) of the trust is for the value of its shares to reflect, at any given time, the price of gold owned by the trust at that time, less the trust’s expenses and liabilities. The trust is not actively managed. It receives gold deposited with it in exchange for the creation of baskets of iShares, sells gold as necessary to cover the trust’s liabilities, and delivers gold in exchange for baskets of iShares surrendered to it for redemption. The trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act.
SHORT:
The investment (DZZ) seeks to replicate, net of expenses, twice the inverse of the daily performance of the Deutsche Bank Liquid Commodity index - Optimum Yield Gold Excess Return. The index is intended to reflect changes in the market value of certain gold futures contracts and is comprised of a single unfunded gold futures contract.
The investment (GLL) will seek to replicate, net of expenses, twice the inverse daily performance of gold bullion as measured by the U.S. Dollar p.m. fixing price for delivery in London. The fund normally invests assets in financial instruments with economic characteristics inverse to the index. It may employ leveraged investment techniques in seeking its investment objective.
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