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Gold ETFs: Bullion Prices Up for 12th Straight Year


While not quite as impressive as their 2011 run, gold exchange traded funds have experienced another golden year, with prices on bullion heading for the 12th consecutive annual gain.

SPDR Gold Shares (GLD) has increased about 6% this year as gold futures end the year above $1,670 per ounce. [Physical Gold ETFs: Which One is Right for You?]

Gold has been performing as central banks around the world took aggressive steps to revive economic growth. Bullion acts as a hedge against inflation and depreciating currencies. Additionally, the precious metal also serves as a type of safe-haven investment against potential bumps down the road.

“The problems we’ve seen over the last year haven’t disappeared,” Thorsten Proettel, a commodities analyst at Landesbank Baden Wuerttemberg, said in a Bloomberg article. “There is still lots of potential for trouble in the world and that is a good reason for people to stay in gold or buy more.”

Gold futures were about 1% higher on the last trading day of 2012 amid reports Washington is very close to a deal on the U.S. fiscal cliff.

“Fiscal Cliff negotiators are still working but investors are taking a very cautious approach and gold as a general haven is viewed as an important asset,” George Gero, precious metals strategist at RBC Wealth Management, said on TheStreet.

According to a Bloomberg survey, 15 of 19 analysts expect higher prices in the first week of the new year, which makes this the largest ratio of bulls since Aug. 24.

With increased interest in gold assets, exchange traded product physical holdings of gold have increased 274.9 metric tons over 2012, reaching a record 2,632.5 tons on Dec. 20, or the equivalent of a year’s worth of mining production.

Some other physically backed gold ETFs include:

  • iShares COMEX Gold Trust (IAU) : up 5.9% year-to-date
  • ETFS Physical Swiss Gold Shares (SGOL) : up 5.6% year-to-date
  • ETFS Physical Asian Gold Shares (AGOL) : up 5.9% year-to-date

For more information on gold, visit our gold category.

Max Chen contributed to this article.

Full disclosure: Tom Lydon’s clients own GLD.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.