For centuries, gold has been the preferred way of accumulating and securing wealth—and with good reason. Unlike other investment instruments, gold is a relatively low-risk investment option, as it predictably appreciates in value over time.
At Rush Gold, we’ve broken the traditional barriers of investing in and owning gold and have brought the power of gold into the palm of your hands with our revolutionary app—buy, sell, gift, and pay in gold with just a touch.
In the world of investing, ETF stands for exchange traded fund, so a gold ETF is an exchange traded fund for only one type of asset, which is gold. As a precious metal, gold is an enduringly popular asset for investors, especially in times when a volatile market makes investors nervous. Gold investing may be perceived as a safe investment, especially as it often performs in the opposite direction to the stock market. A gold ETF is seen as an alternative to buying physical gold and one that is relatively convenient and can be low cost.
How does a gold ETF work?
A gold ETF may trade in assets that are backed by gold rather than ownership of real gold. A gold ETF may allow investors to gain access to gold price movements instead. The way this works is that the ETF will be set up as a trust that will buy gold bars and sell shares. If an investor buys a share in the gold ETF, then they are purchasing a share in the gold owned by the ETF. The investor may not directly own the gold but may own it via this intermediary. However, as a gold ETF is linked directly to physical gold, the price of the shares in the ETF will rise and fall along with the price of gold. A gold ETF may charge a small fee annually to investors, but this may be seen as an acceptable amount for the convenience of using the ETF for gold investing. This is because the investor doesn’t have to worry about the expense and inconvenience of buying and storing physical gold.
Is a gold ETF a good investment?
One of the main benefits of a gold ETF is that they are seen as a convenient way to access the investment benefits that gold can offer. Gold is seen as one of the more safe investments by many investors because of its counter-cyclical nature. This means that gold often responds to changes in the market in different ways to other stocks and commodities. For example, if there is a market event such as a market crash, gold may not be affected, and in fact, it may move in the opposite direction, experiencing growth. Gold is also seen as a way to potentially hedge against inflation as it often responds well in a time of currency debasement and generally tends to retain its purchasing power.
It is also seen as a safe investment because it is tangible, difficult to counterfeit, and cannot be hacked. As a precious commodity, gold is also increasingly in demand, especially in countries such as China and India, but its supply is limited, making it more desirable. Because of these properties, gold is also valued as a portfolio diversifier, as it may help to spread risk or even to minimise it. Investors who want to add gold to their portfolio see shares in a gold ETF as a liquid asset, meaning that the shares are easy to buy and sell when needed, whereas physical gold may be viewed as low in liquidity and with accessibility and storage issues.
How to invest in a gold ETF?
In Australia, there are a number of gold ETFs listed on the ASX stock exchange, the earliest having been established in 2003. To invest, an investor would need to buy shares in their chosen gold ETF on the stock exchange, which can be done through a trading platform. The investor would need an online trading account to make purchases and trade through the brokerage portal every time they wanted to buy or sell their gold ETF shares.
However, at Rush Gold, we are keen to make sure investors get the full benefit of gold ownership. That is why we use a simple structure of direct ownership of gold with no intermediary, meaning that the gold is protected under property rights laws. This also means that there may be less exposure to any systemic risk that may arise from dealing with additional parties.
If you are keen to invest in direct ownership of physical gold but are not sure where to buy gold or how to buy gold in Australia, Rush Gold can help. Although buying physical gold may seem complicated and expensive, we make it so much easier. All you need to do is hop online, download our app, and set up an account, which only takes minutes. There are no minimum purchase amounts, and you own real gold. This gold is kept securely in a vault in Australia, with insurance by Lloyd’s of London. While your gold is kept secure, you can use the app to leverage your investment. You can trade gold, check the gold price in AUD and other currencies, send gold to other people as gifts or payments and even use your gold to make purchases as if it were cash, especially with the Rush Gold Debit Card. Using a digital platform to buy gold and sell gold increases its liquidity, as everything can be done via a mobile phone in moments. Enjoy the ownership of real gold in real time with Rush Gold.
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