The SPDR Gold Shares (NYSEArca: GLD), SPDR Gold MiniShares (NYSEArca: GLDM) and other bullion-backed exchange traded products are scuffling this year as investors seek riskier assets. GLD, the world’s largest bullion-backed ETF, is lower by almost 3.60% this month, sending the benchmark gold ETF to a year-to-date loss of 0.64%.
The drop in the precious metals comes even as headwinds facing the U.S. dollar loom. Last month, the Fed elected to keep rates unchanged last month, holding its policy rate in a range between 2.25 percent and 2.5 percent.
In addition, the central bank alluded to no more rate hikes for the rest of 2019 after initially forecasting two. The capital markets initially expected rates to remain steady after the central bank spoke in more dovish tones following the fourth and final rate hike for 2018 last December.
Global central banks have voracious buyers of gold, a theme that is expected to continue and one that could benefit gold ETFs.
“India’s central bank is likely to join counterparts in Russia and China scooping up gold this year, adding to its record holdings and lending support to worldwide bullion demand as top economies diversify their reserves,” reports Bloomberg.
Gold Buying Binge
Investors have looked to GLD as a quick and easy way to gain exposure to gold price movements as they hedge against market risks, help protect their purchasing power in times of inflationary pressures or capitalize on increasing demand from the emerging markets with a growing middle-income class.
“The Reserve Bank of India’s purchases are part of a wider picture across developing economies that are looking at de-dollarizing their foreign-exchange reserves, according to Ross Strachan at Capital Economics Ltd.,” according to Bloomberg. “The RBI’s buying trend can be sustained for a number of years in relatively small quantities, as part of a long-term diversification, he said.”
Other central banks are expected to continue snatching up gold.
“Further inflows — expected to run as high as 2018 as China, Russia, and Kazakhstan buy — should also be supportive of prices, according to Goldman Sachs Group Inc. Spot gold has lost about 5.6 percent since a peak in February as equities rallied,” according to Bloomberg.
8 Non-Leveraged Gold ETFs to Watch
The following table includes latest data on non-leveraged Gold ETFs listed on U.S. exchanges that are currently tracked by ETF Database. As of 04/25/2019:
|Symbol||ETF Name||Total Assets ($MM)||Average Volume||Previous Closing Price|
|GLD||SPDR Gold Trust||$30,568.10||7,514,664||$120.57|
|IAU||iShares Gold Trust||$12,201.64||13,892,106||$12.23|
|SGOL||Aberdeen Standard Physical Swiss Gold Shares ETF||$851.92||52,265||$123.13|
|GLDM||SPDR Gold MiniShares Trust||$633.61||771,262||$12.75|
|BAR||GraniteShares Gold Trust||$446.85||145,135||$12.74|
|OUNZ||Van Eck Merk Gold Trust||$147.85||40,030||$12.52|
|AAAU||Perth Mint Physical Gold ETF||$105.24||18,962||$12.76|
|DGL||Invesco DB Gold Fund||$101.85||33,427||$39.17|
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