SPDR Gold Shares Still Home To Some Robust Inflows
The SPDR Gold Shares ETF (NYSE: GLD), already the second-largest exchange traded fund in the world by assets, is still attracting new investments despite the fact that many market observers have been lamenting the yellow metal losing its status as a safe-haven investment. For the four weeks that ended on February 8, GLD gained $10.6 million in new investments, according to TrimTabs Research. Since GLD most purchase physical gold every time an investor makes a new purchase of GLD shares, the ETF is among the largest holders of physical gold bullion in the world.
According to statistics published in 2009, GLD is the sixth-largest holder of physical gold in the world, holding more gold bullion than the central banks of China, Switzerland and Japan, among others. As a testament to GLD's recent strength, the ETF hardly flinched in the face of recent news that the International Monetary Fund would sell 191 tons of gold. Also noteworthy is the fact that GLD only traded down by 51 cents on Friday after the Federal Reserve announced it would raised its discount rate.
GLD, one of our holdings in the ETF Profit Report portfolio, certainly did endure its fair share of pain in the latter half of January, and while we may not see the same level of inflows to the ETF in 2010 that were seen last year when the ETF gained $8.5 billion in fresh investments, GLD still gained $776 million in new investments last month.
Gold prices have stabilized in recent weeks and GLD is now up on the year. The World Gold Council said global demand for the yellow metal was up 2.6% in the fourth quarter. To be sure, GLD is one of the more volatile large ETFs out there, but we believe it pays to watch the smart money and that shows us some noteworthy highlights regarding GLD. Hedge fund genius John Paulson is the ETF's largest shareholder. China Investment Corp., China's $300 billion sovereign wealth fund, recently disclosed a $150+ million stake in GLD and George Soros has more than doubled his stake in the ETF to $663 million at the end of the fourth quarter from $242 million at the end of the third quarter.
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