ETF holdings of gold flourished in 2011

ETF holdings of gold flourished in 2011 despite occassional price declines and a sizeable cut in holdings by a major investor. SPDR Gold Trust ETF remained hot favourite among investors this year.

The current market capitalization of the GLD ETF is $71.5 billion, an increase of 22 percent over the course of 2011. At the current price of gold of approximately $1,700 an ounce this represents the equivalent of 1,300 tons of gold. This makes the GLD ETF holding of gold larger than the gold reserves of Russia, Switzerland, the UK, India and China, at least according to official statistics. Despite the price declines, ETF holdings of gold have stayed firm and central bank buying continues apace.

Major investor John Paulson had cut his holding in the SPDR Gold Trust in the third quarter, however Paulson remains the largest holder of GLD with a stake worth about $3.5 billion at the end of the third quarter. Some commentators suggest that any such selling may have been to cover losses in other markets and that long-term investors in gold are retaining their belief in the bull run in gold prices. Despite the reduction in holdings of the SPDR Gold Trust, the price of gold remains well supported. – BullionStreet

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Posted by admin on Dec 19 2011. Filed under Gold ETFs. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry