Clusterstock’s Chart of the Day makes the case that gold ETFs like the massive SPDR Gold Shares (GLD) have helped push prices higher in recent years by letting speculators bet on the precious metal. This “trigger-finger investor base” could exacerbate a crash when the momentum fades, the argument goes.

With more than $40 billion in assets, GLD is the second-largest U.S.-listed ETF behind SPDR S&P 500 ETF (SPY). Huge inflows and the rise in gold prices have resulted in the fund’s assets more than doubling from $18 billion in September 2008, according to J.P. Morgan. The ETF holds more gold than many sovereign nations have stashed in their reserves.

“ETFs have allowed speculative buyers to rapidly move in and out of the asset, which has changed the nature of the investor base driving the metal’s marginal price,” Business Insider writes.

“See, the gold buyers of the past didn’t have the hair-trigger trading capability of the present ETF group, and there was a time when gold was considered simply a store of value rather than a vehicle for making huge upside,” it adds. “Which is why some research firms have voiced concern about gold’s suspected dependency on fund flows for price support.”

GLD saw net cash outflows of $937 million during the first two months of 2010, according to the latest data from the National Stock Exchange. The ETF posted inflows of nearly $7.4 billion last year. GLD rose 24% in 2009 as gold prices marched higher on inflation concerns and other worries. Read more on GLD flows.

ETFs tracking new areas of the metals markets such as platinum, palladium and small-cap miner stocks have been among the most successful launches recently. The next ETF Investing column will take a look at these upstarts.

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