What is a Gold ETF? A gold exchange-traded fund (ETF) is a commodity ETF that consists of only one principal asset: gold. ETFs are similar to individual stocks and trade on exchanges in the same manner. The main aspect that complicates gold ETFs more than traditional stocks is the derivative underlying the investment. A derivative is a “contract between two or more parties whose value is based on an agreed-upon underlying financial asset.” An example of an underlying asset would be a security or commodity. Gold ETFs hold gold derivative contracts that are backed by gold. So when someone invests…...
A Comparison of Gold ETFs and Gold-Backed Cryptocurrencies
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