The value of the GLD during August has increased by 12.1% to $73.9 billion on high volume. All of the main factors that have pushed gold up in price over the last decade are now being amplified more than ever. This is due to the looming debt crisis and the fear of a possible currency collapse.

Total holdings of all gold ETFs recently reached a record of 2,276 tonnes of gold, valued at $130 billion.  The GLD currently holds 41.7 million ounces of gold valued at $73.9 billion. Gold continues to reach new highs in all aspects, as not only are gold ETFs at a all-time high, but the price of gold hit an all- time high as well, now sitting at a bit over $1,800.

Gold ETFs are a good investment, but what does this all mean for the future? Depends on who you ask, but here is a quote from well respected Alan Greenspan:

“Gold is a “thermometer.” So they diffused the thermometer by keeping the gold price managed. And what’s important for people to understand now is that the same thing is going on. If we’re correct, it’s going to lead to a bigger catastrophe, because no one has learned any lessons.”

But the iShares trust GLD has been following right along lock step with gold and the precious metal doesn’t show signs of slowing down anytime soon. With the worlds currencies in constant state of flux, ie Euro vs US Dollar vs Yen, who knows where currency trading and forex gurus are going to stand.

GLD on the otherhand keeps you in the world of trading the precious metal gold while still have the protection of a fund. Now that protection isn’t from your investment, gold can always tank, but at least it will protect you from all the extra taxes that buying and selling real gold bullion can have. Investing in GLD is fast becomming the only way to invest in gold.

But even in all this up and down motion iShares gold trust NYSE:GLD continues it’s move towards the highs of the last year of $122+. Will it see it? That’s the question on everyones mind as Apple NASDAQ:AAPL takes over Microsoft NASDAQ:MSFT in terms of largest tech company in the world.

Well, why wouldn’t gold continue it’s upward trend? The markets are anywhere from stable, and with North Korea and South Korea posturing back and forth, that stability seems a long way off. The markets should continue to jump around and if they do, you’ll see some difficult times with equities make precious metals the place to be. Inventories aren’t going to explode like some analysts say.

The reason we think this, because of GLD. All that inventoried gold has a nice cushion with a trust like GLD that needs to buy gold to make it last. We say look at this one hard to continue its climb.

Who are you to believe?

Well you don’t have to believe us, but when we started this blog gold was below $900. That’s right, well below $900. Now it’s over $1000 and continues to climb. The dollar is weak, which has historically meant gold is a good buy along with other precious metals like silver and platinum. The stock market however, has pushed upwards for the past 2 months amid the weakening dollar, increase in precious metals and uncertainty in the economic outlook of the world.

So where do you invest.

Well, if you’re look at gold, you may want to look into the ETF GLD. GLD is an ETF that is freely traded as a stock and holds all the same value as owning a tenth of an ounce of gold. That’s cause it’s backed by the value of gold. If the fund needs more shares to trade, it buys more gold. The price of the fund tracks the price of gold by a tenth, pretty consistently.

By putting your money into this fund you don’t have to buy gold bullion directly and find a place to store these. If you have to pay to store it, and pay a premium to buy it, it doesn’t make sense to buy it that way. Buy the fund if you need to. Or buy shares in a company that mines or processes gold. But thats a whole nother story.

Or are they?

The Washington Post has a great article on why some investors are fearing the sudden rise in gold, and also why some investors think $1000 is just the beginning. Inflation on the rise, the dollar weakening and a market that isn’t quite sure why it’s almost back at a DOW of 10,000. That’s what has investors scratching their heads and disagreeing.

One things for certain, gold and ETFs like GLD could still be good buys if we continue to see the fed printing money, and worldwide banks scooping up gold as a hedge to the weakening dollar.

Like IAU and SLV, GLD buys and stores gold and allows investors to buy a share of the gold it owns. The price basically tracks the price of gold per ounce at about 1/10th the value of an ounce of gold. Fees are taken off for running the fund, which is the reason for not tracking the price exactly.

Currently, the precious metals market has been taking off as investors try and find a safer place to put their money than the stock market. If you want to buy gold, rather than buy gold bullion, you can purchase gold through the ETF and take advantage of long term capital gains tax benefits. If you buy gold bars or coins you’ll need to pay full capital gains taxes.

These are just some of the advantages that buying gold through ETFs such as IAU and GLD can offer.

Rather than own large sums of gold you own roughly 1/10th an ounce of gold per share you own in the iShares trust. And the best part is, you can trade these easily from your regular stock trading account. This means if you buy and hold you can take advantage of long term capital gains rules rather than taking the sale of a gold bar as a fully taxed gain, as you would do if you owned gold bars.

Some people say they want to be able to hold the gold, but those same people don’t realize that when they buy stock in a company they have nothing to hold, so why not do the same with buying gold. The ETF IAU will allow you to own a piece of a precious metal that has historically held it’s value. And with the spread of wealth around the world increasing, demand for gold can only go up (or so we think).

Buying gold now during this volatile time period may be risky, but if you hold long enough, we imagine that owning an ETF like IAU will prove to be very valuable, and easy to trade.