Specifically we’ll use the ticker GLD as our base for discussion. Gold can be traded, invested, and held as a physical object. However, the most effective way would be to use an investing instrument that has gold backing the product. The ETF specifically allows people exposure to the product while having the ability to exit and enter the market without liquidity fears.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include SPDR Gold income statement, its balance sheet, and the statement of cash flows. Potential SPDR Gold investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although SPDR Gold investors may use each financial statement separately, they are all related. The changes in SPDR Gold's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on SPDR Gold's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of SPDR Gold
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of SPDR Gold performance into the future periods or doing a reasonable stock valuation. The intrinsic value of SPDR Gold shares is the value that is considered the true value of the share. If
the intrinsic value of SPDR is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares SPDR Gold. Please read more on our
fundamental analysis page.
An Additional Perspective On SPDR Gold Shares
There are several different types of product out there, but the important data point is the expense ratio. When you get further away from the traditional market index, people may begin noticing higher expense ratios due to a variety of reasons. GLD is a well know and highly traded instrument, but there may be some other instruments that are less known and can pose price and liquidity issues.
The ways to use a gold ETF such as GLD is to buy and hold like a traditional investment. Many people have talked about having gold as an insurance policy for their portfolio. It tends to be a safe haven asset when the markets get rough. Further more, you can use GLD as a swing trade. Gold tends to move higher and lower depending on market fear as well as negative geopolitical news. This can provide a wonderful opportunity to gain on the market swings. Lastly, there is the option to day trade the instrument, which this particular ETF allows that to happen due to liquidity.
Gold is one of those topics that people seem to be for or against with little middle ground. Typically it is traded or used as insurance, giving people the added dynamic to their portfolio. There are also other factors to keep in mind because gold is a finite commodity, meaning supply and demand can play a factor into price. For an effective gold ETF, check out GLD and use the tools here at MacroAxis to research.
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Nathan Young is a Senior Member of Macroaxis Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of SPDR Gold Shares. Please refer to our
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