A share of GLD represents 0.1 ounce of gold. In other words, the value of a share of GLD is equal to the value of 0.1 ounce of gold. Gold exchange-traded funds (ETFs) expose traders to movements in the price of gold without having to buy the underlying physical asset. VelocityShares' long gold ETN (UGLD) aims to provide three times the return of the S%26P GSCI Gold ER Index in a single day.
The trust seeks to reflect the evolution of gold bullion prices by holding gold ingots and issuing shares backed by their physical metal holdings. Reverse gold funds have expected negative long-term returns because the price of gold generally rises in a fiat monetary system. The value of GLD shares is directly related to the value of the gold held by GLD (minus its expenses), and fluctuations in the price of gold could materially and negatively affect investment in stocks. In 2004, the launch of the publicly traded fund SPDR Gold Trust, with the symbol GLD, equalized the conditions for investment in gold by allowing a cheaper option than buying physical metal.
GLD does not generate any revenue, and since GLD regularly sells gold to pay its current expenses, the amount of gold represented by each stock will decrease over time to that point.