March 13 (Bloomberg) -- SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, expanded to a record, overtaking Switzerland’s central bank holdings as the world’s sixth-largest stockpile.

The fund now holds 1,041.53 metric tons, equal to more than five months of global mine production, data on the company’s Web site show. Switzerland’s gold reserves stood at 1,040.2 tons in December, according to the producer-funded World Gold Council.

Investors are seeking to protect their wealth as economies slump and central banks spend trillions of dollars in response to the worst financial crisis since the Great Depression. More than $30 trillion has been erased from the value of global equities in a year. Some investors are betting that the stimulus spending will devalue currencies and spur inflation.

“We’re seeing the purchasing power of money eroded,” Nick Moore, an analyst at RBS Global Banking & Markets in London, said by phone today. “As the recession bites, people want access to real money and there’s no higher real money than gold.”

Gold has gained for eight consecutive years and advanced another 5.4 percent this year. The MSCI World Index of equities on March 9 traded at its lowest since 1995.

Bullion for immediate delivery traded at $929.79 an ounce at 4:34 p.m. in London, 10 percent below the record $1,032.70 an ounce it reached a year ago.

National Holdings

Gold assets held in all listed ETFs now total a record 1,528 tons, according to RBS. Italy, France, the International Monetary Fund, Germany and the U.S. all have bigger official holdings. The U.S. has 8,133.5 tons.

The gains in gold are attracting hedge funds and other investors. Greenlight Capital Inc., the $5.1 billion hedge fund run by David Einhorn, said last month it invested in gold for the first time in the fourth quarter. Eton Park Capital Management LP had the SPDR Gold Trust as its biggest holding in its filing to the U.S. Securities and Exchange Commission last month.

Nasdaq Dubai Ltd. this month started a gold security, the first exchange-traded commodity to list on the bourse. There are similar securities listed on 12 other international exchanges.

“I’ve never been busier,” UBS AG analyst John Reade said today on a conference call. “Demand is mostly from clients looking to gain access to gold markets” and who are “concerned about the consequences of the global economic recession.”

“We’re seeing more substitution taking place for physical gold from derivatives,” he said.

Exchange Traded

Holdings in Jersey, Channel Islands-based ETF Securities Ltd.’s exchange-traded commodities totaled 6.93 million ounces (215.5 tons) today, according to the company’s Web site. Assets reached a record 7.08 million ounces on Feb. 27.

Exchange-traded products linked to commodities attracted a record $8.7 billion in February, Barclays Capital said in a report yesterday. Gold and energy led $14.3 billion of inflows in the first two months of the year, the bank said.

“What’s been interesting is throughout the past year, when there’s a fall in prices, we’ve still seen people putting more into the ETFs,” Moore at RBS said. “As more of these gold ETFs are launched,” holdings “are likely to increase. They’re now part of supply and demand.”

European central bankers may extend their so-called Washington Agreement, capping gold sales, with an announcement as early as this month, UBS AG analyst John Reade said this week. A new agreement would likely keep the 500-ton limit announced in March 2004, according to Reade, who on Feb. 23 forecast gold to climb to $1,100 an ounce in three months.

Central Banks

Banks sold 358 tons of gold in the fourth year of the agreement through September last year, and another 80 tons since then, according to the World Gold Council.

The Obama administration soon will push Congress for legislation that allows the International Monetary Fund to “mobilize” its stockpile of gold to boost its funds, Treasury Secretary Timothy Geithner said March 11.

The fund’s board approved a proposal in April to sell 403.3 tons of bullion as part of a plan to close the Washington-based lender’s annual deficit. Still, a return to profitability by the IMF may shelve plans to sell some of its gold.

A decision to sell any gold requires an 85 percent majority of the IMF’s executive board, and the board representative from the U.S. needs the approval of Congress to vote in favor of any sales, according to the organization’s Web site.

To contact the reporters on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net; Glenys Sim in Singapore at gsim4@bloomberg.net

Last Updated: March 13, 2009 13:02 EDT