The SPDR Gold Shares ETF (GLD), the pioneer gold ETF in the U.S., celebrates its 20th anniversary this year. Launched on November 18, 2004, it revolutionized the gold market by making gold as easy to trade as stocks, overcoming limitations such as storage issues with physical gold and complexities of gold futures. Thanks to the World Gold Council and State Street, GLD held gold in London vaults, accessible via brokerage accounts. With just a 0.40% fee, it rapidly grew from 33 million to 448 million shares by the end of 2012, during a period when gold was outperforming stocks significantly.
The introduction of gold ETFs has significantly expanded the investor base, with gold demand for investment rising from 10% in 2004 to 25% today, alongside enduring jewelry demand from China and India. Central banks, seeking to diversify reserves, now account for 15% of gold demand.
Despite recent highs, gold faces challenges like a stronger dollar, high bond yields, and a shifting investment focus towards stocks post-Trump victory. Nonetheless, GLD remains the largest gold ETF with $73 billion in assets, although competitive pressures have led to lower-cost alternatives like iShares Gold Trust and SPDR Gold MiniShares Trust.
Innovations continue with ETFs like VanEck Merk Gold ETF offering physical gold redemption, a compelling feature for many investors. George Milling-Stanley, who was pivotal in GLD’s inception, will discuss its implications on CNBC’s upcoming programs.
As the gold market continues to evolve, GLD’s impact is undeniable, making gold accessible, fueling investor interest, and prompting continuous innovation in the ETF landscape.
Original Story https://www.cnbc.com/2024/11/18/the-outlook-for-gold-as-the-granddaddy-of-gold-etfs-turns-20.html
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