Earlier this week, on Tuesday, the United States Federal Reserve Chair Jerome Powell’s testimony before the Congress indicated a tight monetary policy in the near term. Following the remarks of Powell, the greenback slipped 0.4%, and the U.S. 10-year treasury yields fell from their recent highs. As gold can be seen as a hedge against inflation, spot gold prices climbed 1% to $1,819.58 per ounce.
Billionaire ‘Bond King’ and CEO of the investment firm DoubleLine Capital LP, Jeffrey Gundlach, predicted that the economy would be more on recession watch than the past couple of years. He also expects about a 1.5% rate hike this year. Gundlach has a long-term bullish view on gold and a long-term bearish view on the dollar.
Therefore, the gold exchange-traded funds (ETFs) of SPDR Gold Shares (GLD – Get Rating), iShares Gold Trust (IAU – Get Rating), and World Gold Trust – SPDR Gold MiniShares Trust (GLDM – Get Rating) might be solid investments.
GLD as an investment aims to reflect the performance of the gold bullion price, less the trust’s expense. The trust holds gold bars from time to time and has the objective of shares to reflect the price performance of the gold bullion. The trust can be used as a short-term position to hedge against equity market volatility and inflation.
Tracking the LBMA Gold Price PM ($/ozt) index, as of January 12, GLD had $57.16 billion assets under management. The fund has a gross expense ratio of 0.40%, lower than the category average of 0.44%. Over the past three years, its fund flows came in at $9.07 billion. GLD has a NAV of $170.12.
The ETF has gained 1.9% over the past month and 1.5% over the past five days to close yesterday’s trading session at $170.16. GLD has a beta of 0.09.