ETF Trends
ETF Trends

Gold exchange traded funds fell Thursday amid concerns European leaders may not be able to find a workable solution to the debt crisis at a summit this weekend.

SPDR Gold Shares (NYSEArca: GLD) was down more than 1% before the bell. The ETF is on a three-day losing streak.

Gold prices have dropped in lockstep with the equities and commodities markets recently. Many bullion investors are waiting on the next move from Europe at the EU weekend summit.

“The traders for the most part want to hear what concrete action the European union plans on taking to resolve its woes, before they add to current positions,” Miguel Perez-Santalla, vice president at Heraeus Precious Metals Management, said in a report. “It’s looks like were in wait-and-seek mode for now,” he said. [What’s Next for Gold After Pullback?]

Although gold has recovered a bit from its September lows, about an 11% decline, the precious metal has lost some of its safe-haven appeal as its typical inverse correlation to riskier assets has eroded, reported Frank Tang for Reuters. [Gold ETF Correction Raises Question Over Safe-Haven Standing]

Nevertheless, gold prices are still up 40% from last year. Fundamental factors that could support the metal include currency debasement, economic uncertainty and inflation worries. [Gold ETFs Slightly Lower As Markets Eye Bernanke]

Physically-backed ETFs are one of the easiest and most economical ways to gain exposure to the metal. They include:

  • SPDR Gold Trust (NYSEArca: GLD): This is the largest gold ETF, with $71.8 billion in assets, and an average daily trading volume of 24.6 million shares per day. Its year-to-date return is 28.11%.
  • iShares Gold Trust (NYSEArca: IAU): About $9.75 billion in assets under management and an average daily trading volume of 13.5 million shares. The year-to-date return is 28.2%.
  • ETFS Physical Swiss Gold Shares (NYSEArca: SGOL): This fund holds physical gold in Swiss vaults. Assets are at $1.63 billion and average daily trading volume is at 306,000 shares. The year-to-date return on this ETF is 13.91%.This is the newest of the physically-backed gold ETFs, launched in September 2009.

SPDR Gold Trust


Tisha Guerrero contributed to this article.

Full disclosure: Tom Lydon’s clients own GLD.

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.