ETFs get gold prospects gleaming

An important role in gold's recent resurgence has been played by the exchange-traded fund (EFT) market, with streetTracks the pick of the performers.

StreetTracks' Gold Shares ETF, the world's largest such fund, increased its holdings of the precious metal to 566.95 tonnes by Thursday (September 13th), constituting a record high for the company, nearly ten per cent above its figures for the start of the month.

Listed on the New York Stock Exchange since November 2004 and now also on the Singapore Stock Exchange, streetTracks Gold Shares ETF has been one of the fastest growing enterprises in its sector.

ETFs are open-ended mutual funds that can be traded at any time throughout the day, trying to replicate stock market indexes and attracting investors for commodities like gold.

Investing in an ETF is an alternative way of accessing the market for those wishing to buy gold, with some analysts identifying increased buying in ETFs as a key factor in the resurgence of the gold price since mid-August's seven-week low.

"It's been a perfect storm for gold," Virtual Metals analyst Matthew Turner told Reuters, as ETFs and other bullion sales continued to prosper amid dollar weakness and concerns about liquidity in the credit market.