How Do I Invest in GLD?

There are various strategies available for investing in gold, from purchasing physical bars to futures contracts; but among the most popular ways of getting exposure to it are ETFs such as GLD.

GLD is a physically-backed gold ETF, so investors own shares representing fractional undivided ownership of its bullion holdings.

Investing in GLD

GLD and its sister fund (SLV for silver) offer investors an innovative, cost-efficient and secure means of participating in the gold market. Each share represents a fractional ownership interest in an trust that holds actual gold bullion and cash. As gold’s price fluctuates upwards or downwards, so too does GLD’s price respond accordingly.

Even though GLD remains one of the most popular funds among investors, some remain dubious that it actually holds physical metal in London’s HSBC vault. GLD trustee and sponsor World Gold Trust Services is working hard to dispel such speculation; investors can buy shares through any broker and trade them on the NYSE Arca exchange; this ETF makes gold easier to access without risky leveraged trades introducing further profits or losses into their market exposure.

Selling GLD

GLD is one of the many exchange-traded funds (ETFs) that invest in gold mining companies or physical metal and trade like stocks. Investing in GLD doesn’t require storage or insurance costs and is an affordable way to diversify your portfolio without incurring heavy ownership fees for physical metal ownership. Be mindful that annual expenses could sap away a small percentage of your savings each year;

Redeeming GLD

GLD has quickly become one of the most sought-after ways to gain exposure to gold’s market. Now worth $72.4 billion and boasting 40.8 million ounces of physical gold backing it, many investors use GLD as an inflation hedge or safe haven asset.

GLD shares are traded like stocks on a stock exchange, but unlike most ETFs they are backed by physical gold bullion. Their share price tends to track gold’s price through arbitrage; when GLD trades at a premium to gold’s price an Authorized Participant can profit by buying and depositing gold into the Trust; creating new GLD shares which they then sell on secondary markets.

Over time, small portions of GLD’s gold are sold off to pay storage fees to its Trustee and Custodian, so each share represents less and less ounces as time progresses – thus maintaining GLD’s price track with that of gold.

Raymond Banks Administrator
Raymond Banks is a published author in the commodity world. He has written extensively about gold and silver investments, and his work has been featured in some of the most respected financial journals in the industry. Raymond\\\'s expertise in the commodities market is highly sought-after, and he regularly delivers presentations on behalf of various investment firms. He is also a regular guest on financial news programmes, where he offers his expert insights into the latest commodity trends.

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