As inflation and declines in purchasing power loom over investors, gold and its exchange traded funds (ETFs) continue to remain appealing and draw in big assets.
Gold has declined slightly from its highs down to a three-week low, reports Jan Harvey for Reuters. One metals analysts notes that while interest has waned slightly, it appears to be a temporary pause because the long-term bull factors for gold are still there. (What’s driving gold’s uptrend?)
When considering investing in gold ETFs, Don Dion of the Street.com suggests tailoring your choice to your preferences about the quantity of underlying gold, liquidity concerns and geographical location. For more stories on gold, visit our gold category.
There are three choices you have when it comes to playing gold through ETFs:
- SPDR Gold Shares (NYSEArca: GLD) is up 17.7% year-to-date and has seen an astonishing increase in assets, surpassing the $35 billion mark as of Oct. 23. Additionally, GLD is the largest ETF when measured by assets. Gold that underlies GLD is held in the form of allocated 400-ounce London Good Delivery bars in the London vault of HSBC (NYSE: HSB) Bank USA, or in the vaults of subcustodians.
- iShares COMEX Gold (NYSEArca: IAU) is up 17.6% year-to-date and shares of IAU are backed by gold held by the custodian in the vicinity of New York, Toronto, Montreal, London and potentially other locations in the future.
- Physical Swiss Gold Shares (NYSEArca: SGOL) is up 4.9% since its inception on Sept. 9 and has $201 million in assets as of Oct. 23. SGOL has an external auditor inspect the gold holdings twice a year and the gold bar identification numbers are published on the fund’s site. There are also outside audits of the gold holdings. (Why gold is rising).
For full disclosure, Tom Lydon’s clients own shares of GLD.
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.