From Staff Reports
The streetTRACKS Gold Trust Exchange-Traded Fund (GLD), an ETF that Money Morning's investment gurus have recommended several times, has overtaken The Netherlands to take over the No. 8 spot on the list of the world's top holders of gold, ResourceInvestors.com reported on its web site yesterday (Thursday).
The GLD ETF now holds 627.9 metric tons of gold - 138 metric tons behind No. 7 Japan, according to statistics from The World Gold Council and the web site SeekingAlpha.com.
With the ongoing skid in the U.S. dollar, investors have been fleeing the greenback and investing in gold - sending the yellow metal soaring to price levels not seen in nearly three decades. As it gains investors, the GLD ETF has continued to add to its gold holdings, according to the web site. At the same time, central banks - including that of The Netherlands - have been selling their gold reserves. And that's elevated the ETF on the list of global gold holders [See Chart I].
Many analysts expect these trends - the decline in the greenback and central bank sales of gold reserves - to continue, meaning that the streetTRACKS Gold Trust will continue to move up the list. SeekingAlpha Analyst Tim Iacono predicts the ETF will pass by Japan's central bank in roughly five months.
"Based on the current rate of growth ... it will be only about five more months before the last major Asian central bank with a pitiful percent of reserves held as gold bullion is surpassed by the gold ETF," Iacono said. "The combination of recent sales by the Dutch and the steady creation of GLD shares lately ... made this one all too easy to call."
Money Morning Investment Director Keith Fitz-Gerald predicts that with U.S. inflation creeping steadily higher, gold will likely touch $1,000 later in 2008, after experiencing a slight decline early in the year.
[Editor's Note: For our latest investment-research report on gold - part of Money Morning's ongoing "Outlook 2008" series that's previewing the top investments for the New Year - please click here. For our new investment report detailing ways to profit from the declining dollar, please click here. Both reports are free of charge].
Chart I: GLOBAL GOLD HOLDINGS
Rank
|
Country
|
Metric Tons
|
% of Total Reserves
|
1 | United States | 8,133.5 | 75.8% |
2 | Germany | 3,417.5 | 62.7% |
3 | IMF | 3,217.3 | N/A |
4 | France | 2,622.3 | 52.6% |
5 | Italy | 2,451.8 | 64.0% |
6 | Switzerland | 1,166.3 | 37.7% |
7 | Japan | 765.2 | 1.8% |
8 | streetTRACKS GLD ETF | 627.9 | N/A |
9 | The Netherlands | 624.5 | 57.6% |
10 | ECB | 604.7 | 23.7% |
11 | China | 600.0 | 0.9% |
Sources: World Gold Council, SeekingAlpha.com, Money Morning.
News and Related Story Links:
- Money Morning Special Investment Report:
Outlook 2008: Gold Investments Will Continue to Glitter in the New Year. - ResourceInvestor.com:
GLD Knocks off Another on World Gold Holdings List. - Wikipedia:
The Netherlands. - Money Morning Special Investment Report:
Nine Ways to Profit From the Diving Dollar.