Commodity ETFs News:

With a total value of $73 billion and holding nearly 40 million ounces of bullion, the worlds largest gold exchange traded fund hoards more of the precious metal than many of the worlds richest countries.

SPDR Gold Shares (NYSEArca: GLD ) is the largest physically-backed gold ETF. The fund holds gold bullion stored in London vaults and tries to reflect the price movements of gold spot prices. Each share of GLD is equivalent to a tenth of an ounce of gold.

CNBCs Bob Pisani was recently allowed to visit the vaults where the huge ETF stores its gold. The fund holds more than 1,230 metric tons of the shiny stuff.

Morningstar analyst Abraham Bailin cautions that investing in gold is highly speculative, but he also believes that the fund may serve as a reliable investment vehicle for the average investor to access the gold market.

Gold is seen as a safe haven in times of economic uncertainty. It should be noted that a stronger dollar will diminish golds value since gold is priced in dollars and traders wont able to buy as much if the dollar rises. [Gold ETFs Rise as Focus Turns to Rates, U.S. Economy ]

The metal is also viewed as an inflation hedge. While inflation is not a pressing matter now, the Feds loose monetary policy could eventually lead to a rise in inflation.

Bernanke has made it clear that to preserve the stability of our financial markets, he will hold interest rates at historic lows for at least the next couple of years, said Bailin. On this basis, we believe a small position in gold should be considered as an insurance policy.

For their ability to better manage geopolitical, currency, and operation-specific risks, we continue to favor gold-related exchange-traded funds and mutual funds over individual mining company stocks, Bailin added.

However, increased market confidence or waning inflationary pressures pose the largest risks to golds strength, according to Bailn.

Other ETFs tracking gold prices include ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) and iShares Gold Trust (NYSEArca: IAU).

SPDR Gold Shares

For more information on gold, visit our gold category .

Full disclosure: Tom Lydon’s clients own GLD.

Max Chen contributed to this article .

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.