As Central Banks Print More Dollars, The Demand For Gold ETF’s Continues To Grow

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October 10, 2009 8:45pm ETF BASIC NEWS NYSE:GLD

inflation-toilet“As any investor knows, the more there is of something, the lower it is valued. That is the problem with all paper currencies now. Central banks have cranked up the printing presses

 (electronically, anyway) in a desperate bid to prop up financial institutions that are being crushed by the weight of their own bad decisions,” Sean Brodrick Reports From Howe Street.

“But what kind of money can’t be printed? Gold and silver! Precious metals are money — you can use them to buy stuff, and they are the ultimate currency when other currencies are being devalued. As central banks print more, the private demand for gold as an investment and inflation hedge is growing.  Just look at the track of the gold held by ETFs over the past five years,” Brodrick Reports.

Transparent Gold Holdings

“This is all the gold held transparently by gold ETFs around the world — 68.2 million ounces, or 1,933.4 metric tonnes. Gold held in the SPDR Gold Trust (GLD), the biggest exchange-traded fund backed by the metal, hit 1,098 tonnes on Monday — close to record highs. That one fund has passed Switzerland as the world’s sixth-largest holder of physical gold. Looking at the chart, you can see that gold buying by ETFs is accelerating. But if you think the ramp-up in gold-buying by ETFs is something, you should see what’s going on in silver,” Brodrick Reports.

Transparent Silver Holdings

“The biggest silver ETF by far is the iShares Silver Trust ETF (SLV). So far this year investors have sunk nearly $826 million into the SLV, according to Lipper FMI. That’s nearly as much as they pumped in during ALL of 2008. So yes, investor demand for metals is heating up. Sure, all that metal could go back on the market in the future. But for now, this is a very bullish force,” Brodrick Reports.

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