Warehousing bullion for gold's supermarket ( ETF Market holds more bullion than China )

MarketWatch ^ | Jan. 11, 2008 | John Spence, MarketWatch

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As metal hits new highs, exchange-traded fund's $18 billion cache only grows

BOSTON (MarketWatch) -- Imagine being forced to buy gold in such quantities that you run out of adequate space to warehouse all of it.

That's been the high-class challenge confronting the folks at StreetTracks Gold Shares, a wildly popular exchange-traded fund so awash in investor cash that its backers recently scrambled to find a bigger vault to accommodate their ever-growing horde of the precious metal, now valued at $18 billion.

Surging gold prices and ravenous investor demand have unleashed massive inflows at ETFs such as StreetTracks, whose booming holdings now surpass those owned by China and other sovereign nations. The stunning rally in precious metals appears to know no boundaries as gold futures continued an inexorable rise, with prices touching the vaunted mark of $900 an ounce on Friday for the first time.

Investors in StreetTracks Gold Shares have profited handsomely. The fund, shares of which represent fractional ownership of gold bars held in a vault, was a top performer in 2007 and it gained about 20% the past three months.

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Top gold reserves: Nations and ETFs

United States	8,134 metric tons
Germany	3,417 metric tons
France	2,622 metric tons
Italy	2,452 metric tons
Switzerland	1,166 metric tons
Japan	765 metric tons
STREETTRACKS ETF	642 metric tons
Netherlands	625 metric tons
European Central Bank	605 metric tons
China	600 metric tons
Russia	438 metric tons

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