I was led to this Bloomberg article by Cam Simpson about gold through an alert from Albourne Village. It details the creation of gold as a liquid security: an exchange traded fund (ETF) called StreetTracks Gold Trust (ticker: GLD). This was later named to SPDR Gold Trust. Since its inception in 2004, the ETF has expanded beyond the NYSE and is traded in Japan, Hong Kong, Singapore and Mexico. Previously, gold was bought and sold as bullion, coins or part of jewelry.
With all the crises in the past decade (technology bubble, real estate bubble, bailout of financial firms and "Flash Crash"), confidence in stocks is low. Fixed income yields are low due to the Federal Reserve's policies. Investors are turning to buying gold as a refuge.
Last year, John Paulsen of Paulsen & Company launched a gold fund last November. In 2010, it is up 33.6% according to this article at www.businessinsider.com. For a more information about his gold fund, please go to this link. As a side note, there is a quick article about the fund's performance in January (It was down 14%.). This is just a quick comment on the short term attitude on Wall Street and volatility of any concentrated investment.
The author, Cam Simpson, writes that George Soros thinks gold is a bubble but still holds SPDR Gold as the largest position as of September 30, 2010, according to the SEC. Gold may be a bubble but when do you get out of your position?
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