As global economies around the world sputter and world central banks search for the answers, gold is on the rise. The price of gold bullion has jumped around 7 percent since the beginning of the year.Today, the ounce price of gold bullion rests around $1,000, and much higher prices could be just around the corner. The growing money supply of world central banks combined with falling asset prices have put gold back into the spotlight. Ever heard of “the perfect storm?” This could be it.
Let’s analyze a few key gold ETFs:
SPDR Gold Shares (GLD): State Street Global Advisors introduced GLD back in 2004 as the first exchange-traded trust linked to the price of gold bullion. GLD has a mammoth $21.6 billion in assets making it the largest gold ETF in the world. In 2008, GLD had a modest gain of 2.99% compared to a 37.38% decline in the SPDR S&P 500 ETF (SPY). GLD’s annual expenses are 0.40%.
Market Vectors Gold Miners ETF (GDX): This Van Eck Global ETF follows the Amex Gold Miners Index. The underlying index contains 32 mining stocks and GDX was one of the first gold mining ETFs and it currently has $2.6 billion in assets. In 2008, GDX fell 26.65% compared to a 4.32% jump in the value of gold bullion. GDX’s annual expenses are 0.59%.
ProShares Ultra Gold (UGL): This ProShares ETF aims to deliver twice (200%) the daily performance, before fees and expenses, of gold bullion as measured by the U.S. Dollar fixing price for delivery in London. This ETF is structured as a partnership and it uses a combination of forward and futures contracts to execute its investment strategy. UGL was launched in December 2008 and its annual expenses are 0.95%.