• Invest
    Investment Suite
    Stocks
    Mutual Funds
    Future and Options
    IPO
    Exchange Traded Funds
    Commodity
    Stockcase (Stock Baskets)
    Currency
    Non Convertible Debentures
    Sovereign Gold Bond
    Exclusive
    NRI Account
    Private Client Group
    Features
    SipIt
    MTF
    Investment Suite
    Exclusive
    Features
  • Platform
    Product Suite
    Kotak Neo App & Web
    Nest Trading Terminal
    NEO Trade APIs
    Features and Tools
    MTF
    Securities Accepted as Collateral
    Margin Requirements
    Payoff Analyzer
    Calculators
    SIP Calculator
    Lumpsum Calculator
    Brokerage Calculator
    Margin Calculator
    MTF Calculator
    All Calculators
    Product Suite
    Features and Tools
    Calculators
  • Pricing
  • Research
    Research Calls
    Long Term calls
    Short Term calls
    Intraday calls
    Derivatives calls
    Pick of the week
    Top Monthly Picks
    Research Reports
    Fundamental Research Report
    Technical Research Report
    Derivative Research Report
    Research Calls
    Research Reports
  • Market
    Stocks
    Market Movers
    Large Cap
    Mid Cap
    Small Cap
    Indices
    Nifty 50
    Bank Nifty
    FinNifty
    Nifty Midcap India
    VIX
    All Indian Indices
    Mutual Funds
    SBI Mutual Funds
    HDFC Mutual Funds
    Axis Mutual Funds
    ICICI Prudential Mutual Funds
    Nippon India Mutual Funds
    All AMC's
    IPO
    Upcoming IPO
    Current IPO
    Closed IPO
    Recently Listed IPO
    Stocks
    Indices
    Mutual Funds
    IPO
  • Learn
    Resource
    Market Ready
    Kotak Insights
    Infographic
    Podcast
    Webinars
    Youtube Channel
    Quarterly Results
    Investing Guide
    Demat Account
    Trading Account
    Share Market
    Intraday Trading
    IPO
    Mutual Funds
    Commodities
    Currency
    Futures & Options
    Derivatives
    Margin Trading
    Events
    Budget 2024
    Muhurat Trading
    Share Market Holiday
    Market Outlook 2024
    Resource
    Investing Guide
    Events
  • Partner
    Business Associates
    Fund Expert
    Kotak Connect Plus
    Startup connect
  • Support
    FAQs
    Circulars
    Bulletins
    Contact Us
    Forms Download
    Get your Statement
​

Gold Exchange Traded Funds (ETF) Complete Guide

  •  3m
  • 0•
  • 20 Apr 2023
Gold Exchange Traded Funds (ETF) Complete Guide

Are you thinking of buying gold as an investment? However, you are worried about how to keep the gold safe and where to buy to get the genuine gold, isn’t it? So, you do not need to purchase physical gold to invest in it as there is a Gold ETF (exchange-traded fund).

In this article, you will learn what a Gold ETF is and how you can invest in it, and other details.

A Gold ETF is an exchange-traded fund that exclusively invests in gold. Like all other ETFs, these gold ETFs are traded on stock exchanges just like shares. However, these are funds consisting of different assets, and here in the case of gold, it comprises gold derivative contracts.

A Gold ETF consists of futures or options contracts, with the underlying asset being gold. Though you won’t be owning any physical gold by buying these gold ETFs, you can profit from the price fluctuation of physical gold in the market, as the price of gold ETFs ultimately depends on the price of physical gold.

As you may know, Gold significantly helps hedge financial risks in a volatile market. It is a saviour for investors when the market crashes. Gold ETFs can be used to hedge financial risks, economic and geopolitical fallout, and even against forex risks.

Gold ETFs can also be used to hedge against the volatility in the physical gold market. If the market price of gold rises and affects an investor, having Gold ETFs can reduce the risk to some extent. On the other hand, one can benefit from the falling gold market by trading an inverse Gold ETF.

The takeaway is that over extended periods of crude price fluctuations, stocks do not take a different path since there are many other influences on the stocks. On the other hand, when we look at a shorter period of time, the inverse relationship is much stronger.

Broadly speaking, oil prices does not have much impact on the markets, but they do have on the individual stocks and economy as a whole. As we have been witnessing in the current times…

There are certain things you need to be aware of while investing in Gold ETFs-

  • Gold ETFs can be more profitable than other investment vehicles with the underlying asset as gold, especially when you regularly invest a large amount of trade Gold ETFs.

  • Since these are funds, there are fund managers as well. If you pick a Gold ETF just because the fund has a lower expense ratio or the fund manager's fee is low, you may be in trouble.

  • Investing in Gold ETFs can prove beneficial for the short or medium term.

Conclusion

Investing in Gold is nothing new in India, but investing in Gold ETFs is becoming popular with time and evolving technology. Gold ETFs can be a great option if you want to invest in this yellow metal without physically holding it.

Did you enjoy this article?

0 people liked this article.

What could we have done to make this article better?

Read Full Article >
Enjoy Zero brokerage on ALL Intraday Trades
+91 -

personImage
Enjoy Zero brokerage on ALL Intraday Trades
+91 -