A Gold ETF (Exchange-Traded Fund) is a type of investment fund that aims to track the domestic physical gold price and invests in gold bullion
. Gold ETFs are passive investment instruments that provide exposure to gold without the need to directly purchase, store, and resell the precious material
. They are listed and traded on stock exchanges like the National Stock Exchange of India (NSE) and Bombay Stock (BSE)
. Key features of Gold ETFs include:
- Units : One Gold ETF unit is equal to 1 gram of gold and is backed by physical gold of very high purity
- Trading : Gold ETFs trade on the cash segment of BSE & NSE, like any other company stock, and can be bought and sold continuously at market prices
- Redemption : Investors can redeem Gold ETF units for the cash equivalent or receive physical gold in 'Creation Unit' size if they hold an equivalent of 1 kg of gold in ETFs or multiples thereof
- Flexibility : Gold ETFs offer a flexible means to gain exposure to the gold market without having to invest in the physical commodity itself
Gold ETFs have become a popular alternative to physical gold investment, as they provide convenience and efficiency in gaining exposure to the gold market
. Some of the best-performing gold ETFs include the SPDR Gold Trust (GLD), iShares Gold Trust Micro ETF (IAUM), and Goldman Sachs Physical Gold ETF
