In 2024: Why investors are targeting gold ETFs and which one to choose

Gold Resumes Its Call to Market Attention

We are living in a moment where geopolitical tensions, economic uncertainty, and the debate over global fiscal sustainability are prompting investors to seek safe-haven assets. Gold, the ancient metal that has maintained its value through the centuries, is no exception. In fact, gold ETFs have positioned themselves as the most accessible entry point for those wishing to protect their wealth without the complications of storing physical bars.

Why now? The reasons are multiple. Tensions in Ukraine and Gaza, combined with potential political changes in the United States, have intensified the search for financial security. Simultaneously, the expectation that central banks will soon start to cut interest rates suggests that the dollar could weaken, which traditionally favors gold prices measured in dollars.

Understanding Gold ETFs: Physical vs. Synthetic

Unlike buying gold directly, a gold ETF is an instrument that replicates the behavior of this asset. There are two main modalities:

Physically backed: The fund holds actual bars stored in vaults managed by recognized financial institutions. Each share you own represents a fraction of the physical gold held.

Synthetic: They use derivatives (futures, options) to track the price. While they may offer lower expense ratios, they introduce counterparty risk.

For most retail investors, physically backed ETFs are safer and more transparent. Fees typically range between 0.09% and 0.40% annually, significantly lower than traditional gold mutual funds.

Is Investing in 2024 Really Worth It?

The answer depends on your profile. If your risk tolerance is low or medium, gold ETFs can be an excellent diversification tool. These funds do not generate returns on their own like dividend-paying stocks, but they offer something equally valuable: stability during turbulence.

Let’s consider the fundamentals: according to data from the World Gold Council, 71% of surveyed central banks in 2023 plan to increase their gold reserves in the coming months. This reflects a global strategy of distrust toward traditional fiat currencies. If institutions of this caliber are betting on gold, retail investors have good reasons to follow suit.

Another critical factor: global debt. Economies like the United States (public debt over GDP of 129%) and Japan (263.9%) face historic debt levels. These fiscal imbalances fuel inflation and erode the currency’s purchasing power. Gold, as a risk-free asset, acts as a natural buffer.

The Data Speaks: Stable and Diversified Demand

One of gold’s biggest attractions as an investment is that its demand comes from multiple sources simultaneously:

• Jewelry: 581.5 tons in Q4 2023
• Investment: 258.3 tons (with ETFs playing an important role)
• Central Banks: 229.4 tons
• Technology: 80.6 tons

In total, global demand reached 1,149.8 tons. It has rarely fallen below 1,000 tons in the last 14 years. This demand stability, combined with an offer that cannot expand rapidly (mining and recycling), creates a natural price floor.

The Top 6 Gold ETFs for 2024

1. SPDR Gold Shares ETF (NYSE: GLD)

The market giant with $56 billion in assets under management. Tracks bars stored by HSBC in London, offers unmatched liquidity (8 million shares daily) and an annual fee of 40 basis points. Current price: $202.11, with a 6.0% gain in 2024.

2. iShares Gold Trust ETF (NYSE: IAU)

Another titan with $25.4 billion in assets and a fee of just 25 basis points. Backed by JP Morgan Chase, with a daily volume of 6 million shares. At $41.27 per share, also up 6.0% this year.

3. Aberdeen Physical Gold Shares ETF (NYSE: SGOL)

More accessible option at $20.86 per share with $2.7 billion in assets. Gold stored in Switzerland and the UK, with an ultra-competitive fee of 17 basis points. Annual return of 6.0%.

4. Goldman Sachs Physical Gold ETF (NYSE: AAAU)

Only 18 basis points in fees, well below the industry average (63 basis points). $614 million in assets, custody by JPMorgan in the UK. Priced at $21.60 per share with a 6.0% increase.

5. SPDR Gold MiniShares ETF (NYSE: GLDM)

The ultra-low-cost option with just 10 basis points annually. $6.1 billion in assets, 2 million shares traded daily. At $43.28, with a 6.1% increase in 2024.

6. iShares Gold Trust Micro ETF (NYSE: IAUM)

The most economical on the market: 0.09% fee. Accessible at $21.73 per share (ideal for retail investors) with $1.2 billion in assets. Gains of 6.0% since the start of the year.

Historical Performance: 2009-2024

Over the past 15 years, the spot price of gold has returned 162.31%. Comparing with our six ETFs:

• IAU leads with 151.19%
• GLD follows with 146.76%
• SGOL accumulates 106.61%
• AAAU totals 79.67%
• GLDM records 72.38%
• IAUM (launched in 2021) just 22.82%

These numbers reflect the long-term robustness of these instruments, though with variations depending on their age and structure.

Practical Strategy for 2024: Key Recommendations

Define your goal first: Are you seeking protection against inflation? Diversification amid volatility? Exposure to central bank decisions? Your answer will determine which gold ETF is best for you.

Always diversify: Do not concentrate your entire portfolio in gold. Complement with stocks, bonds, and other assets. A typical allocation might be 5-15% of your portfolio, depending on your age and risk appetite.

Invest with a long-term horizon: Gold is volatile in the short term. Buy with the intention of holding for years, not months.

Choose based on costs: If your capital is small, favor low-cost ETFs like GLDM or IAUM. If substantial, the difference of 25-40 basis points is insignificant compared to the liquidity of GLD or IAU.

Monitor macro context: Geopolitical tensions, central bank decisions, dollar movements. Gold responds to these stimuli.

Closing: Gold as a Compass in Uncertain Times

The global financial architecture faces pressures never seen before. Uncontrolled debt, depreciated currencies, geopolitical uncertainty. In this scenario, gold ETFs are a valuable tool, not to get rich, but to preserve wealth.

Small investors today have a historic advantage: democratic access to these instruments with minimal amounts and low fees. You now know your options, their costs, and their track record. The next step is yours: assess whether positioning yourself now in this precious metal makes sense for your personal financial strategy.