How To Invest in Gold ETFs – Investing in Gold ETFs Beginners Guide 2021

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When we look at it from a traditional point of view, investing in an ETF has been viewed as a safe option when it comes to investing. For a lot of people investing in Gold, ETFs might be the best option out there. This is due to the fact that you will not have to physically purchase Gold, transport it, and worry about any level of theft. If that is the case, investing in Gold ETFs might be the best option you are looking for.

By investing in Gold ETFs, you are taking advantage of doing everything digitally. Throughout this guide, we will discuss the best gold ETF brokers and explain exactly how you can start investing in Gold ETFs.

#1 Broker to Invest in Gold ETFs – eToro

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$50
Mobile AppYes
  • Buy over 800 stocks with 0% commission
  • Social trading network
  • Copy over 12 million traders and investors

How to Invest in a Gold ETF – Step by Step Guide 2021

We have a deep level of understanding of how Gold ETF investments work, and as such, we are aware that this can be quite a challenge, especially when it comes to newcomers to this type of investment. To make this step a bit easier for you, we have created a step-by-step guide as to how you can invest in Gold ETFs easily through the usage of our preferred brokerage, eToro. You need to complete each of these steps in order to get the results that you want.

  • Step 1: Open an eToro Account: Before you start investing, you will need to create an account with a broker.  Head over to eToro, click on “Join Now” and fill in the required information.
  • Step 2: Verify your Identity: The next step that you need to take, once the first one is completed, is to verify your identity. Simply photo ID, something like a passport or a driver’s license, as well as proof of address, such as a bank statement or a utility bill.
  • Step 3: Fund your account: Once your eToro account has actually been verified, the next step you need to make is to actually fund it. To do so, click on “Deposit Funds” and select your preferred payment method. Select how much you would like to deposit and click on “Deposit.”
  • Step 4: Invest in Gold ETFs: Once you have completed all of the aforementioned steps, the next thing you will need to do is actually invest in a Gold ETF. Type in “Gold” on eToro, click on the relevant option, and press invest. Then all you have to do is enter how much you would like to buy, after which you can click on invest.

Where to Invest in Gold ETFs – Choose a Broker

1. eToro – Best Overall Gold ETF Broker

If you have heard anything about the world of online investments, the chances are high that eToro was a part of that discussion. eToro is one of the oldest brokerages out there and has been online since 2007, serving over 23.2 million users. The main point of appeal here is that they offer an extremely easy-to-use investment platform, which is complete with a wide range of investments. Regardless of your trading experience, you should have an easy time understanding how everything on eToro works.

A high level of security and privacy

eToro is regulated by the FCA and CySEC, which are tier-1 regulators. This means that you will not have to be worried about your data or money being misused. With the goal of ensuring that any sensitive information you are required to provide is secure, the website is SSL encrypted. Additionally, users get access to 2-factor authentication, which allows them to set up an additional layer of protection for their accounts.

Many unique features

eToro is known for features such as the CopyTrading feature, which allows any user to earn passive income through investing without much prior investing experience. You can essentially copy the trades of other successful traders. Another feature is known as CopyPorfolios, and you even get access to a range of indicators. eToro has managed to find a good balance and has created a platform that both beginners and experts can love.

eToro Fees

Fee Type Fee Amount
Commission Fee 0%
Deposit Fee £0
Withdrawal Fee £0
Inactivity fee £10 per month

 

Pros

  • Fully regulated
  • Features CopyTrading and CopyPortfolio as excellent features
  • 2-Factor-Authentication is an availability
  • Has low fees
  • Fully SSL encrypted

Cons

  • Lack many indicators

67% of retail investor accounts lose money when trading CFDs with this provider.

2. Hargreaves Lansdown – a premium gold ETF broker

There is another personal and premium way through which you can invest in Gold ETFs, and this is through the usage of Hargreaves Lansdown. It was initially founded In 1989, and since then, its main focus has been enabling a premium investing experience which is accessible to just about anyone.

The security and privacy options

With the goal of ensuring that the customers have a high level of security, HL is regulated, which means that it is subject to regular audits and follows strict data protection rules.

AN interesting aspect about it is the fact that all UK-based investors are covered up to £85,000 by FSCS insurance, which is exceptional and gives investors peace of mind. They also feature a security center, which is designed to educate each customer on potential security issues as well as how to spot a threat and how to protect themselves.

Additional features

When it comes to features, Hargreaves Lansdown provides a premium experience due to the fact that they have an investment consultancy service through phone or face-to-face meetings. They have made this an availability to all of their customers. They also offer a high level of customer support through email support as well as a dedicated phone line that works from Monday to Saturday. You also have a high number of options available to you. However, all of these features come at a cost, which makes it one of the most expensive investment options out there, which can be tricky, especially if you are just starting out.

Hargreaves Lansdown Fees

Fee Type Amount
Commission £11.95
Withdrawal Fee £0
Deposit Fee £0
Inactivity Fee  £0

 

Pros

  • Consultancy services are available
  • There are many analytical tools
  • Users can get educated on a lot of subjects

Cons

  • High fees on the platform
  • Mainly supports GBP as a currency

67% of retail investor accounts lose money when trading CFDs with this provider.

What is a gold Exchange-Traded Fund?

ETFs are short for exchange-traded funds, which can be bought as well as sold in a similar way as stocks would. On the other hand, Gold ETFs are a great way to invest in Gold without actually needing to buy the Gold directly. The returns generated from ETFs are based on the movement of the price of Gold. Gold ETFs can be bought or sold in the same way as other ETFs would.

If you are the type of investor that wants to invest in Gold without risking holding onto Gold in its physical form, you can essentially start participating in gold exchange-traded funds, which might be the best option for you.

Gold ETFs are these mutual funds that invest in Gold. When you buy a single unit of gold ETF, you are essentially purchasing the equivalent of one gram of hold. The gold ETF essentially tracks the price of Gold, where the value of your holdings will, in turn, rise or fall with the price of the metal itself.

When you compare regular mutual funds that need to be redeemed through the fund house, you can buy or sell ETFs directly on the stock exchange. ETFs are an easy way through which you can invest in a wide range of securities as well as commodities, where, as the name might imply, gold ETFs specifically specialize in the metal in question.

Gold ETFs are like a share of a company that you can buy off a stock market, for example. You can sign up for a brokerage account and make a purchase or sale through that account. All you really need to do is sign up for an available service that will allow you to do so. If you are already buying stocks out there, then buying ETFs should be a simple and straightforward process for you as well.

To buy Gold ETFs online, you will need to sign up for an account at a brokerage and log in to your account. Then you will need to browse through gold ETF options and pick the one that you have intentions of purchasing. Next, make sure to place your order, authorize payment through your linked bank account, and you should see the units of the gold ETF credited to your account on the account in question that you are using.

Every unit of a gold ETF represents a single gram of Gold and is 99.5% purity. This physical good is then stored in vaults of custodian banks and works as the underlying form through which the units can derive value from. 

Is investing in Gold ETF a good investment

ETFs are essentially one of the most efficient ways through which you can diversify your investment portfolio. This is due to the fact that gold ETFs are much safer than investing in coins, as you can get benefits without needing to worry about the safety of Gold, for example.

If you buy Gold physically, you will need to store it somewhere, and no matter how secure that location is, it is always at risk. Through gold ETFs, on the other hand, it is far more convenient for you to purchase them as you will not have to worry about storing physical blocks of Gold. The pricing is also transparent, and you will not need to test the quality of the Gold neither. Due to the fact that ETFs are passively managed funds, they have a lower expense ratio when compared to other funds as well.

Investing in a Gold ETF- What are the Positive Sides

No price variation

There is no price variation, or in other words, gold ETFs are bought and sold at the same rate, which might not always be the case when it comes to physical Gold.  The market of physical Gold operates at different prices in different locations across the world; the buying and the selling rates are different as well, with the intention of covering the liquidation and other costs which can be incurred through the process of trading physical Gold.

Assured Purity

When you deal with Gold ETFs, the purity is assured due to the fact that the sector is organized and that 99.5% purity is the standard. On the other hand, Physical Gold might lack this level of transparency when it comes to the trust of the purity level.

Convenience

Another way through which gold ETFs have an advantage is convenience. In other words, the convenience of selling them can never be matched to transacting physical goods, and as such, this leads to a high level of liquidity.

You do not need to worry about the theft of the Gold in question, as it is stored in an electronic form, so you will not need to physically move it from one location to another.

Investing in a Gold ETF- What are the Risks

Although ETFs are generally seen as investments with a low level of risk associated with them, there are some that exist.

Fluctuation

There is a risk of fluctuation. In other words, Gold has a history of showing a high level of growth only when the economy lacks a certain level of stability. While Gold is one of the most stable options out there, it did recently fluctuate in value a bit.

Time Limitations

Trading on the stock exchange is also limited to five working days, from specific time-frames. In other words, it can be difficult to trade Gold in the exact way you would with physical Gold, which could be available throughout specific stores 12 hours per day. Note that there are exchanges and trading options out there that might be available 24/7, but this is not always the case.

Fees

There are fees charged by the brokerage, which are added to the purchase cost. These are a requirement in order for the purchase to run smoothly. The expense ratio includes fees for the record pension, the payments covering the salaries of the employees, as well as other general expenses, something you will not find with physical Gold. There are exchanges that might charge minimum to no fees. However, this is dependent on the brokerage you end up picking.

How to Invest in a Gold ETF with eToro

If you want a detailed guide on how to start with investing in a Gold ETF exactly, you have come to the right place. This guide will show you everything you need to know about investing in eToro’s gold ETFs, which is one of the easiest ways through which you can get exposed to Gold onto your portfolio.

Step 1: Open an account with eToro

The first way to start investing is to register with a trusted brokerage, in the case of Gold ETFs. Always ensure that you are using a regulated platform to get the best results. eToro is recommended precisely due to this reason, as both FCA and CySEC regulate it, and as such, you have peace of mind knowing that your funds are in good hands. To start, simply go to the official eToro website and press the “Join Now” button that you will find on your homepage. You will be required to fill in the necessary information on this menu.

Step 2: Verify your Account

Due to the fact that eToro is regulated, you will need to go through regular audits and comply with strict regulations that surround money laundering. This essentially means that you will need to verify your identity before you can invest with eToro or any other broker that is reputable. That said, you will only need a couple of documents, and these include a photo ID and proof of address.

Step 3: Fund your account

Hopefully, by this step, you have successfully verified your eToro account. If that is indeed the case, the next step that you will need to fulfil is to fund your account. Just click on the button which is marked as “Deposit Funds,” and you can enter however much you want to invest; finally, click on “Deposit.” You will be able to see your available funds in the “Portfolio” section. Keep in mind that eToro supports a wide variety of payment options, including credit cards, debit cards, bank transfers, and e-wallets such as PayPal and Skrill, among others.

Step 4: Invest in Gold ETF

In this final step, all you really need to do is go to the eToro search bar and type in “Gold,” click on the relevant option and press the blue button which is marked as “Invest,” then just type in the amount of money you would like to invest before clicking on it officially. 

Conclusion

Gold ETFs might be an excellent option for investors who want to diversify their investment portfolio and are simply looking for something new to invest in. They can also appeal to investors who want exposure to Gold and want to participate in the market. Gold ETFs are backed by Gold of 99.5% purity, and as such, they are investments that have a low level of risk associated with them. The area is suited for investors who want to find low-risk investments as a result of this.

Gold ETFs also reduce the risk as well as the costs associated with storing Gold. Moreover, they are also a lot more tax-efficient when compared to buying physical Gold. Investors who want to invest in Gold to get a return and reduce taxes might be best suited towards investing in Gold ETFs as a result of this.

Furthermore, gold ETFs track the prices of Gold in real-time, and investors who want to track their investments on a real-time basis could consider investing in Gold ETFs as their safest option.

After reading this guide, hopefully, you are now equipped with the knowledge required to invest in Gold ETFs with ease. All you have to do now is select the best Gold ETF brokerage and start investing immediately. If you are still undecided on which one is right for you, we recommend eToro due to the fact that it is an excellent entry point for a lot of new investors.

eToro – Best Platform to Invest in Gold ETFs

1
$50
Mobile AppYes
  • Buy over 800 stocks with 0% commission
  • Social trading network
  • Copy over 12 million traders and investors

FAQs

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About Milko Trajcevski PRO INVESTOR

Milko Trajcevski is a truly determined content writer with a passion for the crypto industry and has a successful track record of researching and effectively writing articles about cryptocurrency, non-fungible tokens, and blockchain covering the fields of crypto-asset regulations, wallets and exchanges, liquidity, altcoins, DApps, forks, mining, laddering, security and enterprise blockchain technology.