The world’s largest gold exchange traded fund (ETF) has been getting a lot of attention amid the market turmoil, but the newly approved bailout plan could dampen enthusiasm for the safe haven investment.
The House gave the seal of approval to the $700 billion package, and now it’s off to President Bush for signatures. As soon as the measure was OK’d, the SPDR Gold Shares (GLD) went south.
The value of GLD in September rocketed by $4 billion as investors sought safe havens, reports John Spence for the Wall Street Journal. Assets are now perched above $21 billion. The amount of gold in the trust jumped by 16% last month, meaning that the fund holds just slightly less gold than Japan. Year-to-date, GLD is breaking even.
But since a price spike in September, volatility in the gold futures market has sent the ETF bouncing around like a ping-pong, sending it up sharply some days, down more on others. Yesterday, the fund closed down 4.2%. On Sept. 17, the fund shot up a whopping 10.9%, but on Monday, it declined 5%.