Will The CFTC Force A Hand On The Gold ETF (GLD)
“This is an extremely important time for gold prices. If they can break up and through resistance at $1,000, we could see an exponential rise in the value of gold. The question is, will you be able to take advantage of rising gold prices? You see, for the past few years, individual investors have been taking advantage of rising commodity prices—like gold—by buying commodity-based exchange-traded funds (ETFs) and exchange-traded notes (ETNs),” Wade Hansen Reports From BloggingStocks.
“The SPDR Gold Trust (GLD)—an ETF that actually buys gold and holds it on reserve—has been a favorite of gold investors. It has been so popular, in fact, that the trust now holds more than $32 billion of gold on reserve,” Hansen Reports.
“The impact these commodity ETFs have on the futures market has caught the attention of the Commodity Futures Trading Commission (CFTC), and the CFTC is now investigating whether or not it will curb the amount of futures contracts any ETF can hold. Regulators are also looking at potential limits on the amount of gold and other commodities ETFs can hold. ETFs may be forced to limit the number of shares they have available. They may even be forced to redeem shares and cut availability even further,” Hansen Reports.
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ETF’s have provided a great way to trade in the commodities markets and individual investors are hoping that things can stay that way!
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The investment (GLD) seeks to strive to reflect the performance of the price of gold bullion, less the Trust’s expenses. The Trust holds gold, and is expected to issue baskets in exchange for deposits of gold, and to distribute gold in connection with redemption of baskets. The gold held by the trust will only be sold on an as-needed basis to pay trust expenses, in the event the Trust terminates and liquidates its assets, or as otherwise required by law or regulation. The Trust is not managed like an active investment vehicle, and it’s not registered as an investment company under the Investment Company Act of 1940.
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