Gold-backed ETF (GLD) Draws $1.2B Inflows Amid Banking Crisis — Outpaces Stocks, Bonds

Zinger Key Points
  • The SPDR Gold Trust ETF (GLD) has had a $1.3 billion inflow since the U.S. regional banking crisis.
  • Gold recently outperformed both major equity indices and bonds, as investors flocked to safe havens.

Since the start of the regional banking crisis in the United States, $1.2 billion has flowed into the SPDR Gold Trust ETF GLD, a gold-backed ETF that invests in physical metal bars and is managed by World Gold Trust Services, LLC. 

GLD's price spiked to a one-year high on Monday to as much as $183.84 per share. Each share of GLD is intended to mirror the price of a tenth of a troy ounce of gold. Gold prices briefly surpassed $2,000/oz on Monday, before retracing to $1,970/oz as of this writing. 

As the banking sector was rocked by the collapse of Silicon Valley Bank, Silvergate Capital and Signature Bank, funds began pouring into GLD beginning on March 13, when $709 million entered the ETF. On March 17, GLD received an additional sizable inflow of roughly $400 million. Year-to-date flows into GLD have now turned positive by $579 million.

SPDR Gold Trust Fund Flows: Periodic daily, weekly, and cumulative year-to-date – Chart: Koyfin

A Safe-Haven Outperforming Both Equities and Bonds

Gold has lately piqued the interest of investors due to a combination of factors, including the banking crisis, expectations of lower Fed interest rates, no-default risk, and its traditional inflation-hedging role.

In the current market environment, gold is emerging as the ideal asset to have in a portfolio, and it recently outperformed both equities and bonds.

GLD is up by about 7% month-to-date compared to Invesco QQQ Trust's QQQ 4.4% gain, iShares Core US Aggregate Bond ETF's AGG 2.5% increase, iShares US Treasury Bond ETF's GOVT 2.4% gain, SPDR S&P 500 ETF Trust's SPY flat performance, and iShares Russell 2000 ETF's IWM's negative 6.7% return.

Read next: Will Bank Runs and Failures Cause a Run on Gold and Silver? How Precious Metals Can Protect Your Wealth

Month-to-date performance of GLD, QQQ, AGG, GOVT, SPY and IWM.

After taking into account both the price effect associated with the rise in gold prices and the effect of fund flows, GLD's asset under management (AUM) has increased by $4.19 billion over the last week to reach an overall $58 billion.

Overall, GLD's AUM is still 16% below the peak of $70 billion reached in April 2022 and about 35% below the peak of $84 billion reached in August 2020.

GLD AUM as of March 20, 2023 – Chart: Koyfin

Read more: Is The US Stock Market Riskier Than It Used To Be? A Look At Data From 1960s To Present

Photo: Shutterstock

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Posted In: NewsBroad U.S. Equity ETFsSpecialty ETFsCommoditiesTreasuriesEconomicsMarket-Moving ExclusivesMarketsETFsGLDGoldSafe HavenSPDR Gold Trust
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