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Gold ETF Impact

Wed, Feb 4 2009, 11:45 GMT
by The Trader's Journal Collaborators

The Trader's Journal

This article is taken from the Trader's Journal magazine (December 2008 issue)

The author, Adam Hamilton, writes for an acclaimed monthly newsletter, Zeal Intelligence, that details exactly what they are doing in terms of actual stock and options trading based on the lessons they have learned in their market research.

• Adam Hamilton discusses the smashing success of the SPDR Gold Shares (GLD) exchange traded fund. In its four-year existence, GLD has altered the dynamics of the way gold is traded

In the midst of our seemingly endless slog through the dark sentiment wastelands plaguing the markets, we have a birthday to celebrate. Four years ago this week, a revolutionary exchange traded fund (ETF) was launched that forever changed trading dynamics within the global gold market. Known today as the SPDR Gold Shares, GLD has been wildly successful by any measure.

GLD’s rise to fame has not been easy. While a few contrarians loved the idea of a gold exchange traded fund to broaden investor participation in this gold bull, many investors were very skeptical. Some were downright hostile. Although rehashing the obstacles GLD has faced is beyond the scope of this essay, I wrote about a gold ETF in 2002, before GLD hit the market. I also wrote about GLD itself in early 2006, late 2006, and late 2007. These past essays can still fill you in on GLD’s history and dispel many myths surrounding it.

GLD has gone on to become not only a juggernaut in the gold world, but in the entire ETF world as well. This week, GLD was the 3rd largest ETF on the planet with $18 billion worth of net assets (physical gold bullion in its vaults)! Only the SPY S&P 500 ETF and the EFA large-cap foreign stocks ETF were larger. GLD is bigger than the famous QQQQ NASDAQ 100 ETF, the DIA Dow 30 ETF, the XLF S&P 500 financial stocks ETF and the XLE S&P 500 energy stocks ETF. GLD is huge!

• Read the whole article

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Other article in this issue:

• Five Steps to Consistent profits

Published on  Wed, Feb 4 2009, 11:45 GMT

• More Reports from this Contributor

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