Page 2 of 2 What's interesting is that the other two U.S. bullion-backed gold ETFs—the iShares COMEX Gold Trust (NYSE Arca: IAU) and the ETF Securities Physical Swiss Gold Shares (NYSE Arca: SGOL)—haven't seen nearly the same boost in demand as GLD. IAU and SGOL are substantially smaller than GLD, with only 25.2 million and 3.2 million outstanding shares apiece, respectively (in comparison, GLD has about 363 million outstanding shares). IAU holds about $2.76 billion in assets under management, while SGOL holds $334 million, according to the National Stock Exchange. One might think that with increased general interest in gold ETFs, both funds might see a pickup in investor demand. But in fact, we're seeing the opposite: Since the beginning of 2010, SGOL has started cannibalizing IAU's shares, like Ross Perot siphoning votes from George H.W. Bush:
Shares Outstanding For U.S. Bullion-Backed Gold ETFs
Source: Bloomberg data. Figures quoted in thousands (000). And the rock that is GLD remains. So ... Where Does Gold Go Next? If gold truly is in a bubble, then the sky's the limit for where gold goes next. A recent Bloomberg survey reported 15 of 22 analysts forecasting that the yellow metal would make further gains this year, with Goldman Sachs predicting $1,380/oz in the next 12 months. HSBC concurred, predicting a peak of $1,300/oz in 2010. Continued buying by central banks may lend support to prices as well. Last year, the world's central banks became net gold buyers for the first time in two decades—and according to CPM Group, at least, the trend could continue. Currently, central banks hold approximately 18 percent of the total gold ever produced. Add that to continued uneasiness over the world economy—and, of course, fears over inflation—and we could see gold go much higher in the days ahead. Still, despite its great run recently, gold has a long way to rise before I get my free steak dinner. And I haven't forgotten what Brian Nick said when we had him on our site a few weeks ago (in an interview many of our readers found very controversial): "Look at virtually any other market where you'd see signs that people were worried about inflation, and they don't exist anywhere—except the gold market." If you liked this article, then check out:
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