Investing in Gold ETFs in 2024: A Precious Metal Safe Haven with Opportunities and Risks

Against the backdrop of escalating global economic uncertainties, ETF de oro is once again becoming a focal point for investors. This seemingly traditional investment tool has sparked a new wave of enthusiasm due to its unique risk hedging features and low entry barriers. So, is now the right time to consider investing in ETF de oro? And which products are worth paying attention to?

Why ETF de oro Is Gaining Attention in 2024

Multiple factors are prompting investors to reassess the investment value of ETF de oro this year.

First, the deterioration of geopolitical tensions provides strong support. Conflicts in Ukraine and Gaza continue to escalate, and tensions between the US and China, Russia, Iran are intensifying. In this environment, gold, as a traditional safe-haven asset, is regaining investor interest.

Second, changes in interest rate policies create new upside potential for oro. As is well known, gold prices have an inverse relationship with the US dollar. With the Federal Reserve possibly lowering interest rates, the dollar depreciation expectation is rising, and international gold prices are expected to climb further. More importantly, rate cuts will weaken the appeal of fixed-income assets, prompting capital to flow into gold, cryptocurrencies, and other alternative assets.

It is also important to note that global debt levels have reached historic highs. US public debt accounts for 129% of GDP, and Japan’s debt ratio is as high as 263.9%. Against this background, concerns about the stability of the future financial system are increasing. More analysts believe that a new international financial order based on gold rather than the dollar may emerge in the future. Federal Reserve Chair Jerome Powell recently stated that the US is on an “unsustainable fiscal path.” In the face of such macro uncertainties, ETF de oro undoubtedly becomes the most convenient defensive choice.

The Essence and Mechanism of ETF de oro

ETF de oro is an investment instrument that tracks gold prices, allowing investors to gain exposure to this asset without holding physical gold. Depending on the tracking method, these products are divided into two categories:

Physically-backed ETFs directly hold gold bullion stored in secure vaults, with each share representing ownership of actual gold. This structure offers the most direct price tracking and highest security.

Synthetic ETFs track gold prices indirectly through derivatives contracts (futures, options, etc.). While they may have lower expense ratios, this approach introduces counterparty risk, and investor returns depend on the issuer’s ability to meet obligations.

Compared to directly holding physical gold or traditional mutual funds, ETF de oro has clear advantages: high liquidity, tradable at any time during market hours; low management fees, typically between 0.1% and 0.4% annually; low price thresholds, with shares costing only a few tens of dollars, suitable for small investors.

Current Market Conditions: Contradictory Signals

Although ETF de oro performed steadily in 2024 (about 6% increase in the first half of the year), there is an interesting contradiction in fund flows. According to the World Gold Council, over the past nine months, ETF de oro experienced net outflows. In February alone, global outflows reached $2.9 billion, with North America accounting for $2.4 billion, Europe $700 million, and Asia recording a net inflow of $200 million.

This capital withdrawal did not significantly drag down gold prices, thanks to strong demand support. Central banks worldwide remain eager to buy gold; in 2023, 71% of surveyed central banks said they would increase gold reserves in the next 12 months, up from 61% in 2022. This reflects ongoing doubts about the US dollar’s reserve status and confidence in gold as the ultimate store of value.

From the demand perspective, gold is sourced from four channels, with balanced and relatively stable distribution. In Q4 2023, global gold demand reached 1,149.8 tons, with jewelry accounting for 581.5 tons, investment (including ETF purchases) 258.3 tons, central bank purchases 229.4 tons, and industrial use 80.6 tons. This diversified demand structure ensures the resilience of gold prices.

Key Considerations for Investing in ETF de oro at Present

Personal risk tolerance is paramount. Investors with high risk appetite may prefer high-growth assets like technology stocks; those with moderate or lower risk tolerance should consider allocating a portion of their portfolio to ETF de oro to buffer against volatility in other assets.

Diversification is essential. Gold’s greatest value lies in its low correlation with traditional stocks, effectively reducing overall portfolio risk. Do not concentrate all funds in a single asset class.

Long-term holding perspective. While gold prices may fluctuate in the short term, ETF de oro is a powerful tool against inflation and systemic risks over the long run. Historical data shows that since 2009, spot gold prices have increased by 162.31%, demonstrating its long-term value.

Macro outlook awareness. Although gold is often seen as a safe-haven asset, timing investments is equally important. Current global interest rate decline expectations, debt crisis concerns, and escalating geopolitical conflicts create rare multiple favorable conditions for gold investment.

Six Mainstream ETF de oro Products

1. SPDR Gold Shares (NYSE: GLD)

The most liquid gold ETF, managing assets of $56 billion, with an average daily trading volume of 8 million shares. It tracks physical gold stored in HSBC vaults in London, priced in USD. Annual fee is 0.40%, share price is $202.11, with a 6.0% increase in 2024.

2. iShares Gold Trust (NYSE: IAU)

The second most liquid product, managing $25.4 billion, with an average daily volume of 6 million shares. Custodied by JP Morgan Chase in London, with an expense ratio of just 0.25%, share price at $41.27, up 6.0%. Since inception, IAU has delivered a total return of 151.19%.

3. Aberdeen Physical Gold Shares (NYSE: SGOL)

Gold stored in Switzerland and the UK, with a scale of $2.7 billion and an average daily volume of 2.1 million shares. Fee ratio is only 0.17%, share price at $20.86, up 6.0%. It is one of the most affordable mainstream products.

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

Backed by top international investment banks, custodied by JPMorgan Chase, stored in UK vaults, with assets of $614 million. Cost is just 0.18%, well below the industry average of 0.63%. Share price at $21.60, up 6.0%.

5. SPDR Gold MiniShares (NYSE: GLDM)

A low-cost version launched by State Street, with the lowest fee among physical gold funds in the US at just 0.10%. Managing assets of $6.1 billion, with an average daily volume of 2 million shares, share price at $43.28, up 6.1%.

6. iShares Gold Trust Micro (NYSE: IAUM)

Currently the lowest-cost ETF de oro, with an expense ratio of only 0.09%. Assets of $1.2 billion, average daily volume of 344,000 shares, and a share price of $21.73, up 6.0%. Note that this product was launched in 2021, with a historical return of only 22.82%, lacking long-term data.

Long-term Performance Review: Who Wins and Who Loses

Comparing the performance of these products since 2009, differences become apparent:

IAU leads with a cumulative return of 151.19%, demonstrating strong management by iShares. GLD closely follows, with the same return, indicating comparable management quality of these two large funds. SGOL achieved 106.61%, showing that more dispersed custody locations did not impact performance. AAAU, despite its low fees, has a long-term return of 79.67%, somewhat lagging, possibly due to its shorter management history. GLDM’s 72.38% return aligns with its ultra-low fee structure. The newly listed IAUM, only three years in the market, has a return of 22.82%, which is not yet meaningful for long-term assessment.

Three Major Recommendations for Investing in ETF de oro in 2024

First, clarify your personal investment goals and risk appetite. Before allocating to any ETF de oro, define your expected returns and loss tolerance clearly. Gold’s characteristic is providing stability rather than high yields, making it suitable for investors seeking capital preservation rather than chasing quick profits.

Second, achieve genuine diversification. Don’t put all your eggs in one basket. Even with the best ETF de oro, it should be part of a larger diversified portfolio, including stocks, bonds, cryptocurrencies, and other assets.

Third, adopt a long-term allocation mindset. The power of gold investment lies in long-term compounding and inflation hedging. Avoid trying to buy high and sell low; instead, adjust your allocation periodically based on macroeconomic conditions and hold steadily.

Final Thoughts

In an era where central banks worldwide are increasing gold reserves, debt crises are intensifying, and geopolitical conflicts are frequent, participating in the gold market through ETF de oro has become an increasingly rational choice. These products allow even small investors to gain exposure to this safe-haven asset at minimal cost.

The question now is not “whether to invest in ETF de oro” but “how much to allocate.” The answer varies by individual, but ignoring gold entirely in the current macro environment is undoubtedly an unwise investment decision.