Jump to content
AskTraders Trading Community
  • 0

What are the advantages of Gold ETF?


Stella

Question

1 answer to this question

Recommended Posts

  • 0

Hi Stella,

ETF typically track the performance of an index. Gold exchange-traded funds usually track the prices of gold. When you invest in Gold ETF, your objective is to invest in indexed gold ETF of a certain stock exchange. 
Investing in gold ETF comes with very many uses that allure many investors into it. However, like any other exchange-traded funds, certain things can bar you from investing in gold ETF.
One advantage of investing in gold ETFs is that you will incur minimal fees. Gold ETF with them little or no charges. You may have to pay premiums when you buy gold products such as jewelry and gold coins, making gold ETF a better investment option to other gold products. 
When you invest in gold ETF, you are best assured that your gold is safe. Other gold products like jewelry and bars are easy to steal hence a lousy investment option. The earnings you will get from gold ETF are almost similar to that of real gold. 
When the value of the dollar is falling, that of gold starts to rise. This is a proper hedging mechanism for your portfolio. Consequently, when the price of the dollar is rising, that of gold will fall. Identifying this trend is easy and will help you know when you should sell or buy a gold ETF, enabling you to make a profit and minimize your losses.
Gold ETF are highly liquid; hence it is easy to buy and sell them. They tend to favor short and medium-term investors.
It will be easy for you to sell off gold ETF through your broker. The case is usually different when you invest in physical gold since there are times when the bank may decline from buying back your gold.
Your physical gold will need a safe where you will store the gold, and you have to pay annual safe fees for keeping it in that bank. Also, when you are selling it, the bank will deduct a certain amount. You will not incur such costs when you invest in gold ETF.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. To reply to this question, sign in or create a new account.

Guest
Reply to this question

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...