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ETF Investor Demand Has Helped Support Gold Markets

May 19, 2020

 

Gold-related exchange traded funds have enjoyed increased interest as more investors turn to the easy-to-use investment vehicle.“The main demand right now is from investors. So, the demand from the jewelry sector is pretty steady. The demand for technology is pretty steady. The demand from central banks is pretty steady over the last few years. But, really, the marginal buyer is the investor – that’s the real thing that drives the price of gold up or cause the price to fall,” Will Rhind, CEO, GraniteShares, said at the Inside ETFs conference.We are currently seeing greater demand for gold exposure through ETFs as an easy way to hedge against ongoing risks and as a way to protect purchasing power in light of aggressive monetary easing policies like near-zero interest rates and infinite bond purchasing.As a way to tap into the gold markets, investors may consider the GraniteShares Gold Trust (BAR), one of the cheapest gold bullion-backed ETFs on the market with a 0.17% expense ratio.

 

BAR sets itself apart from competitors in that it uses a different custodian to other gold ETFs, thereby making it easier for investors to diversify their gold holdings and lower vault concentration risk. ICBC Standard Bank acts as the custodian, and the vault that holds the gold bars is located in London.The gold in BAR is independently inspected by a third party specialist firm two times a year, which means investors can access the reports and look at the gold bars GraniteShares hold. The ETF does not lend out its gold, and the bars are held in allocated form.Each share of BAR represents close to 0.01 ounces of physical gold.

 

Source: https://www.etftrends.com