Gold ETF

Gold exchange traded funds (ETFs) offer some of the same protections to investors as a traditional investment in gold; however, when overall market performance improves, gold ETFs tend to decrease in value. Physically-backed gold ETFs  offer the most security for investors, since the gold used as an underlying security is actually physically held by the investment company. Futures-backed gold ETFs  , by contrast, are based on futures securities and depend upon accurately predicting the future market direction of gold-backed securities. While less secure than physically-backed investments, futures-backed ETFs tend to produce higher earnings with a correlating higher degree of risk.

Gold ETF vs. physical gold

The primary advantage of the gold ETF vs physical gold is its convenience and ease of resale. Physical gold must be stored securely, creating additional expenses for the owner, and charges usually apply to the transfer and sale of the gold as well. In contrast, gold ETF holdings can be readily bought and sold on the open market, making them a far more convenient and liquid choice for investors interested in short-term profits and protection against sharp downward turns in the overall securities market.

Types of gold ETFs

Generally, gold ETFs are divided primarily into physically-backed and futures-based varieties, but within these classifications there are a number of different types of gold ETFs . Probably the most popular gold ETF is SPDR Gold Shares (GLD); gold ETF GLD security investments offer solid performance historically and provide a valuable hedge against market fluctuations. SPDR gold ETF GLD assets amount to approximately $37 billion, making it one of the largest financial holders of physical gold as well. Short gold ETFs make good financial sense for investors in times of economic growth, while a leveraged gold ETF can allow more exposure with less initial capital outlay for those who can tolerate a significant level of risk in investment.

Gold ETF list

Whether the investor’s preference is for a leveraged gold ETF or a short gold ETF , there are numerous gold-based ETFs on the market from which to choose. Gold securities are also used as part of the basis for various metals and combined commodities ETFs, which may offer more diversification options for investors who want a solid investment basis in gold. Here are some of the leaders in the gold ETF marketplace.
  • SPDR Gold Shares (GLD)
  • SPDR S&P Metals & Mining (XME)
  • iShares COMEX Gold (IAU)
  • ETFS Physical Swiss Gold Shares (SGOL)
  • Market Vectors Gold Miners (GDX)
  • ProShares UltraShort Gold (GLL)
  • PowerShares DB Gold Fund ETF (DGL)
  • PowerShares DB Gold Short ETN (DGZ)
  • PowerShares DB Gold Double Long ETN (DGP)
  • PowerShares DB Gold Double Short ETN (DZZ)
Tim Ord
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