Gold ETFs

1. Title: Gold ETFs People these days look forward to many kinds of investments. Out of which the gold investment is the best investment which can be done in many ways. People can purchase gold as a real asset or they can purchase an ETF (Exchange traded fund) that reflects and replicates the gold price. They can also invest by trading and options in the commodity market. Some people think that a direct investment in gold is much more difficult than investing in stocks or shares. This is so because they feel that stocks and shares can be easily transferred in case the prices fall and this can be done almost everywhere in a dematerialized form. This is something which is being carried off from the past as commodities have always been difficult to invest in because of the increasing problems in their transfers. But if one talks of today, it has become easier to invest in gold in which the investor is free from dealing with the gold in its physical form. In such a scenario the ETF’s are a good resort. This is so because they are much convenient and exciting way of buying and investing gold without the risk of handling the bullion. If one defines specifically, ETFs are a type of financial instruments that help in the easy buying and selling of commodities, and now we shall deal with gold ETFs in this article. When we talk of ETF, we generally refer those authorities or institutions that issue ETFs, and keep the relevant amount of gold in there storage and issue certificates against them. Such a method is adopted so that one can deal with gold or exchange it without much of hassles. The trading pattern of a ETFs is just like any other company on a stock exchange. People dealing with it can do it in a similar pattern like they do it in case of any other stock. The techniques are same as one does with any other stock like short-selling, marginal buying, and purchasing one or more than one of them. It has generally been observed that in the Indian stock market, the Stock Exchange and the Gold prices rise in different directions, and so buying some gold ETFs can also add diversity and safety to one’s portfolio. But these days the increase and decrease in the gold price is not only due to changes in the local market but also due to changes in the international market. These ETFS quote the real gold price floating in the market. Gold exchange traded products like the ETFs are traded on major stock exchanges like Mumbai, Paris, London, NYSE, and Zurich. Coming to the history of gold one can see that the very first gold exchange trade was in the Central Fund of Canada, a closed-end fund, as long back as 1961. The idea of gold exchange- traded fund (gold ETFs) has originated from the Benchmark Asset Management Company Private Ltd in India. The very first proper gold ETF took its conception in Australian Stock Exchange in the year 2003. Reference: http://www.goldetf-funds.com/