Fund Report: State Street’s Gold ETF Shines as Gold Surges
Since its launch in 2004, the SPDR® Gold Shares ETF (GLD®) has become the largest and most traded gold-backed exchange-traded fund, providing investors with a convenient way to gain exposure to gold without owning the physical metal. Over the years, GLD has solidified its place as a key investment vehicle, particularly during times of economic uncertainty.
In 2024, GLD has continued to perform strongly, tracking the rise in gold prices as investors flock to the precious metal amid persistent inflation, geopolitical tensions, and volatile equity markets. This performance underscores gold's enduring role as a safe haven and the importance of GLD® in modern portfolios.
State Street Global Advisors’ Chief Gold Strategist George Milling-Stanley describes GLD® as an “easy way to access movements in the gold price,” and adds “that was really the contribution that we made 20 years ago when we brought the fund to market in partnership with the World Gold Council.”
Why Do Investors Need Gold in Their Portfolios?
Gold has long been considered a valuable asset for investors seeking diversification and protection against economic uncertainty. Its unique characteristics, such as its scarcity, durability, and historical use as a store of value, have made it a desirable investment for centuries. Gold can help to balance risk, hedge against inflation, and provide a potential safe haven during times of market turmoil.
“The principal reason I think that most investors look to gold is for protection,” says Milling-Stanley, adding that investors often tend to be overexposed to traditional assets like stocks and bonds and that they may use gold as “protection against potential inflation, potential weakness in the equity market, and potential currency depreciation, whichever currency one is operating in.”
What’s Driving Gold’s Price Now?
Gold is up more than 31% in 2024, lifting funds like the GLD®ETF along with it, and State Street’s Chief Gold Strategist explains that this year’s higher gold prices can be attributed to an increase in central banks buying the precious metal, fears around China’s economy, and a weakening U.S. dollar.
Milling-Stanley says that “net central bank buying in the first half of 2024 was the highest we've ever seen in in any first half in history” and that he expects this trend to continue.
Meanwhile, a slowing Chinese economy has the country’s investors fleeing to risk-off assets like gold. The Chinese investor “has abandoned his stock market and has moved into the traditional alternative investment, which for the Chinese people for hundreds if not thousands of years has always been gold.”
Finally, as the Fed’s fight with inflation winds down, it decreases interest rates, which weakens the U.S. dollar. A weaker U.S. dollar typically leads to higher gold prices because gold is priced in dollars, so when the dollar declines in value, it takes more dollars to buy the same amount of gold. Additionally, a weaker dollar makes gold cheaper for foreign investors, increasing demand for the metal and driving up its price. Gold is also seen as a hedge against currency depreciation, further boosting its appeal when the dollar weakens.
Why an ETF Like GLD Makes Sense Now
As the largest and most traded gold-backed ETF, GLD® allows investors to gain direct access to the price of gold without the challenges of owning physical bullion. It serves as a hedge against inflation, market volatility, and currency fluctuations, making it a valuable tool for diversifying a portfolio and preserving wealth during economic uncertainty. With GLD®'s backing by physical gold, investors can trust it as a reliable, transparent, and easily accessible way to invest in the precious metal.
Important Risk Information
Investing involves risk including the risk of loss of principal.
The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.
Investing involves risk, and you could lose money on an investment in SPDR® Gold Trust (“GLD®” or “GLD).
ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.
Diversification does not ensure a profit or guarantee against loss.
Assets may be considered ""safe havens"" based on investor perception that an asset's value will hold steady or climb even as the value of other investments drops during times of economic stress. Perceived safe-haven assets are not guaranteed to maintain value at any time.
Commodities and commodity-index linked securities may be affected by changes in overall market movements, changes in interest rates, and other factors such as weather, disease, embargoes, or political and regulatory developments, as well as trading activity of speculators and arbitrageurs in the underlying commodities.
Investing in commodities entails significant risk and is not appropriate for all investors.
Important Information Relating to GLD®:
GLD has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents GLD has filed with the SEC for more complete information about GLD® and this offering. Please see the GLD prospectus for a detailed discussion of the risks of investing in GLD® shares. The GLD® prospectus is available by clicking here. You may get these documents for free by visiting EDGAR on the SEC website at sec.gov or by visiting spdrgoldshares.com. Alternatively, GLD or any authorized participant will arrange to send you the prospectus if you request it by calling 866.320.4053.
GLD® is not an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and is not subject to regulation under the Commodity Exchange Act of 1936 (the “CEA”). As a result, shareholders of GLD do not have the protections associated with ownership of shares in an investment company registered under the 1940 Act or the protections afforded by the CEA.
GLD® shares trade like stocks, are subject to investment risk and will fluctuate in market value. The value of GLD shares relates directly to the value of the gold held by GLD (less its expenses), and fluctuations in the price of gold could materially and adversely affect an investment in the shares. The price received upon the sale of the shares, which trade at market price, may be more or less than the value of the gold represented by them. GLD does not generate any income, and as GLD regularly sells gold to pay for its ongoing expenses, the amount of gold represented by each Share will decline over time to that extent.
The World Gold Council name and logo are a registered trademark and used with the permission of the World Gold Council pursuant to a license agreement. The World Gold Council is not responsible for the content of, and is not liable for the use of or reliance on, this material. World Gold Council is an affiliate of GLD’s sponsor.
GLD® is a registered trademark of World Gold Trust Services, LLC used with the permission of World Gold Trust Services, LLC.
Intellectual Property Information: The S&P 500® Index is a product of S&P Dow Jones Indices LLC or its affiliates (“S&P DJI”) and have been licensed for use by State Street Global Advisors. S&P®, SPDR®, S&P 500®,US 500 and the 500 are trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and has been licensed for use by S&P Dow Jones Indices; and these trademarks have been licensed for use by S&P DJI and sublicensed for certain purposes by State Street Global Advisors. The fund is not sponsored, endorsed, sold or promoted by S&P DJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of these indices.
For more information, please contact the Marketing Agent for GLD: State Street Global Advisors Funds Distributors, LLC, One Iron Street, Boston, MA, 02210; T: +1 866 320 4053 spdrgoldshares.com
Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus which contains this and other information, call 1-866-787-2257 or visit ssga.com. Read it carefully.
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State Street Global Advisors, 1 Iron Street, Boston, MA, 02210-1641
Not FDIC Insured - No Bank Guarantee - May Lose Value
7396577.1.1.AM.RTL
Exp. Date 11/30/2025
