GLD - SPDR Gold Trust

The GLD – SPDR Gold Trust is an exchange traded fund on the New York Stock Exchange which was created to track the price of gold. Instead of buying physical bullion, investors can use the fund to invest in the price of gold bullion as a whole. This differs from buying individual shares or whole market shares using another fund like the GDX. Initial pricing for the gold trust was based on one tenth of an ounce of gold. The SPDR Gold Trust is sponsored by the World Gold Trust Services LLC, the HSBC Banking group is the custodian and BNY Mellon Asset Servicing is the trustee. Investing in the SPDR Gold Trust is open to anyone, with a minimum order of just one share. A regular broker is required, and shares in the trust can be traded like any other share throughout the trading day.

For a lot of people, investing in the Gold Trust is advantageous because, the transaction costs are usually lower than the expenses related to the buying, storage, and insurance of regular physical gold bullion purchases.

Although on paper it seems like investors are buying gold, in actuality nobody receives the physical gold bullion, it is simply held in trust and represent with certificates along with the shares, the same as when a share represents a portion of a company’s assets.

People invest in gold bullion for a number of reasons, both practical and strategic. Due to positive demand and a strong market, investors have been buying gold in the past few years because of its appreciation in price and likelihood of future returns; but a lot of investors purchase shares in the Gold Trust for more advanced reasons. At the top of this list is for investment diversification. It is seen as a safe investment because Gold is not linked to the rest of the stock market, in that it generally holds its value and doesn’t fluctuate with downturns and inflation. Many people invest in gold because it can hold out over a down period, when money loses its value.

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