Gold ETFs or Mining Stocks: Which Is the Better Bet?
By Helen Burnett-Nichols
NEW YORK (Minyanville) -- It is no secret that the second quarter of 2012 is proving to be a tough one for gold. After climbing 4% in the first quarter, the SPDR Gold Shares ETF (GLD) is now up only 0.5% (to May 17) after briefly moving into negative territory, as bullion has continued its decline since late February.
Still, in its first-quarter Gold Demand Trends report released last Thursday, the World Gold Council reports that investment demand was the only sector of the gold market to register year-on-year growth in Q1, led by "solid demand" for ETFs and similar products. Indeed, the WGC reports inflows of 51.4 tonnes into the sector, with a value of $2.8 billion.
Earlier this year, Bloomberg reported that holdings of physical gold in ETFs have more than tripled in the last five years to 2,390.5 metric tons, at a value of around $137 billion. In February, Peter Miller, BMO Capital Markets' head of equity capital markets in Canada, told Bloomberg that gold ETFs have "been a huge hoover of capital and competition for the gold companies."
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