4 Replies to “Query – How Gold ETF works?”

  1. A gold ETF is designed to track the gold price. How it does this depends on the particular ETF.
    GBS tracks the price by buying physical gold.Others may use an Index to do it. You would have to check each individual ETF.
    An alternative to etf or gold bars is coins. In particular Krugerrands or maybe UK Sovereigns



  2. A gold ETF doesn’t engage in any business activity, so your money won’t “grow” like investing is a growing company. The ETF simply pools the money and buys bulk gold and sells it to redeem shares. If the price of gold goes up, you profit, otherwise, you lose.

    Buying physical gold is a bad idea. There are the same risks as with an ETF, plus the fact that you are adding fees and big commissions for the dealer to buy and to sell.


  3. Mention your nationality or you get irrelevant answers from foreigners.

    I purchased Reliance Gold ETFs on 17/09/2008 at Rs 1148/- per unit.

    Today after more than 13 months the unit price is Rs 1589/- i.e. a gain of 39%

    The unit price is equivalent to 1gm of gold.

    Do not buy physical gold. You loose on taxes.

    HMT





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