Gold Exchange Traded Funds
Posted by Adam King on February 02, 2010
Thailand has approved the implementation of gold exchange traded funds on its capital market. This announcement signals another growth step for the worldwide gold market and an additional means of investing in this valuable precious metal. Analysts say that the amount of gold in funds is increasing dramatically as more traders look for investment options that are not tied to a currency.
A gold exchange traded fund or GETF, is similar to any other exchange traded fund except that it trades against changes in gold spot price. GETFs are also traded on the major markets such as Zurich, Mumbai, London, Paris and New York.
Worldwide, these funds are based on "physical" holdings that are overseen fund managers. Additionally, Thai gold dealers will be allowed to act as sales agents for the funds, eliminating the traditional brokers from the sales process.
While most investors globally won’t begin trading GETFs on the Thai market, this new venture does have significance for them. The continued expansion of gold trading shows that the consensus opinion is that gold will continue to be in high demand and to have a strong profit potential. With gold prices hovering near $1,080 per ounce, this market expansion should be an encouraging sign for many who want to add gold to their portfolio.
While GETFs are less risky than futures investing, there is risk involved. This risk makes holding physical gold in the form of bullion or rare coins a better option for many people. Traders should use their own skill for analyzing the market, and then work with a reputable gold exchange to get the bullion and certified rare coins that could appropriately protect and expand one’s portfolio.
Senior Staff Writer – Certified Gold Exchange
US Gold Market