ETFs on Physical Gold

Many investors are wondering what is easier and more profitable to buy – physical gold or gold ETF?

What is interesting about gold for investing or saving your funds for retirement, I already wrote in an article about Gold IRA Rollover and you can watch YouTube videos from Robert Kiyosaki, Warren Buffett and Alan Greenspan there.

The main advantage of gold is that it is not only an analogue of a currency, but also a commodity, which gives it value. Moreover, this trend has been going on for several millennia, and the gold trend has been growing for many years. Therefore, it can be used not only as insurance against dollar devaluation, but also as insurance against inflation and even deflation. Gold is especially popular among savvy investors during times of crisis.

You have probably already heard that gold is very liquid, so traders can buy and sell this metal in a variety of ways, from buying physical gold (for example, in the form of gold coins and bars) to exchange-traded funds (ETFs).



Physical Gold Price Chart

If we talk about the prices of Physical Gold or various ETFs for gold or physical gold, then they tend to be similar to the prices of ordinary gold (I mean spot gold or gold futures, which is traded on the CME Group Chicago exchange).

Gold belongs to the category of precious metals. It is also a popular trading tool in the financial world. The principle of gold trading on ETF today is no different from currency trading. Various brokers offer a trading instrument, either in the form of pure gold GOLD, or in the form of a quoted asset XAU/USD.

If a trader decides to earn with the help of the trading asset in question, he needs to responsibly approach the issue of choosing a broker, because the result of trading with the instrument in question depends on the correct analysis of his work and the relevant conditions. I only recommend brokers who work in the USA on the Chicago and New York exchanges.

So, to invest in gold, you can use listed products such as ETFs and ETCs. In most cases, they follow the spot price of gold. By charging fees for managing your capital.

Trading mainly takes place in 12.5-kilogram bars. The funds themselves acquire them and store them in their vaults. Today, in 2022, gold is traded in the form of 19 ETFs and ETCs. Liquidity is high enough that it provides a minimum spread between bid and offer, just like when trading futures or trading gold bars.


ETF Overview

As I wrote above, backed gold ETFs track the spot price of the precious metal. To do this, fund managers accumulate physical gold bars and coins in their vaults. As a standard, each share of the fund is worth one ounce of gold.

Below is a list of physical collateralized ETFs traded.

Fund Name Fund CCY Fund Size TER 1Y
(in m €) in % p.a. in %
EUWAX Gold II EUR 938 0.00% 4.36%
EUWAX Gold EUR 468 0.00% 4.33%
Xetra-Gold EUR 12,430 0.00% 4.05%
Amundi Physical Gold ETC (C) USD 3,537 0.12% 3.92%
Invesco Physical Gold A USD 12,477 0.12% 3.91%
HANetf The Royal Mint Physical Gold ETC Securities USD 249 0.22% 3.83%
Xtrackers IE Physical Gold ETC Securities USD 1,961 0.15% 3.80%
WisdomTree Physical Swiss Gold USD 3,223 0.15% 3.78%
Xtrackers Physical Gold ETC (EUR) USD 2,521 0.25% 3.75%
WisdomTree Physical Gold USD 4,941 0.39% 3.54%
Gold Bullion Securities USD 3,300 0.40% 3.52%
WisdomTree Core Physical Gold USD 366 0.12% 3.05%
iShares Physical Gold ETC USD 11,366 0.15% 2.89% Gold ETC EUR 14 0.00%
GPF Physical Gold ETC USD 15 0.12%
Updated: Feb. 2022

Commissions and fees for trading ETFs are often lower than the costs associated with buying, holding, and insuring physical gold. But in each specific case, it is better to study the commissions in advance, because. it all depends on the volume of gold you would like to trade and the time period for which you buy the precious metal.


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