SPDR Gold Shares (GLD), the exchange-traded fund (ETF) that holds physical gold, represents a core investment for individuals and institutions alike, says Tom Lydon, editor of ETF Trends.com.
"The whole idea here is instant access to gold," Lydon tells Yahoo.
"It's very inexpensive, with an expense ratio that is only 0.4 percent, and you can buy it in the morning and sell in the afternoon, so liquidity is a huge factor."
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In addition, GLD directly tracks the price of gold, Lydon notes. So it’s not like buying a gold coin, where you aren’t sure the price you pay matches the true market price for gold.
With over $70 billion of assets, GLD is the world’s second largest ETF behind the SPDR S&P 500 (SPY) ETF, which has assets of $103 billion.
Everyone from hedge fund titans like George Soros and John Paulson to mom and pop investors have jumped into GLD.
“For the average investor, gold is no longer a speculative investment,” Lydon says. “It’s a foundation investment. Investors aren’t as excited about the [stock] market and are looking for non-correlated assets.”
GLD offers an excellent hedge against stock holdings, he says.
December Comex gold futures hit an almost six-month high of $1,716.90 an ounce Thursday, after European Central Bank President Mario Draghi announced an unlimited bond-purchase program.
“Expectations of inflation rising after Draghi’s statements are supporting gold,” Adam Klopfenstein, a market strategist at Archer Financial Services, tells Bloomberg.
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