Gold ETF Research: Gold Trading Volume Spikes
Christian Magoon: Gold trading volume has recently surged in the gold trading capital of the world, London. According to a report by Gold Speculator based on recent data from Bullion Vault and the LBMA, daily clearing volume for gold this fall has rivaled the highs of the summer of 2011. This spike in gold interest corresponds with gold’s QE3 rally and the continuing uncertainty regarding the U.S. fiscal cliff.
Gold and gold ETFs have and will likely benefit from continued financial liquidity efforts by Central Banks. In addition the potential fiscal cliff created by U.S. politicians at the end of 2012 is causing more investors to seek the safety and scarcity of gold.
Year to date physical gold ETF products which own bars of gold, have gained double digits despite a tough month of October. Historically October has been a negative month for the price of gold and ranks as one of the three worst months to own gold in the last 10 years. The good news for gold ETF investors is that November has historically been the best month for gold prices. Here’s a snapshot of the year to date gold ETF performance grid from GoldETFs.biz.
Gold ETF products have gained double digits year to date.
The iShares Gold Trust (NYSEARCA:IAU) is the leading gold ETF in 2012. It also is the lowest priced gold ETF charging one quarter of one percent or 25bps. The other gold ETFs charge either 39 or 40bps. The largest gold ETF (NYSEARCA:GLD) in the world, trails IAU by 27bps year to date.
Over the last month gold ETFs have been in negative territory primarily due to a rough October. Last week however concerns mounted on the possibility of the fiscal cliff in the U.S. which pushed gold upward by around 2.5%. Going forward it appears that uncertainty or negative news on the potential for a solution to the U.S. fiscal cliff will be positive for gold ETF investors. For now it appears gold has resumed its historical safe haven status for investors.
Christian Magoon is Publisher of GoldETFs.biz and IndiaETFs.com. He is also CEO of Magoon Capital, a strategic consultant firm to asset managers. Christian Magoon is an ETF insider, having launched over 40 ETFs in the United States to date. A widely recognized thought leader on finance and market issues, Christian regularly contributes to many financial media outlets. Prior to forming Magoon Capital in 2010, Christian was President of Claymore Securities (now Guggenheim Investments), where he built one of the fastest growing and most innovative ETF businesses in the country, gathering more than $3 billion in AUM in three years. He launched more than 40 ETFs, introducing many “firsts” to the U.S. market, including the first Frontier Markets, Sector Rotation, Solar Energy, Timber, BRIC and suite of China focused ETFs. Christian consistently provides his industry insights and knowledge as a commentator in the U.S. media speaking publicly on macro investment issues and ETF related topics. Follow him on Twitter @ChristianMagoon. In 2008, he was named by Institutional Investor News as one of the five people to watch in the U.S. ETF marketplace. In 2011,Financial Planning magazine dubbed Christian an “ETF Pioneer.”