Said that, if you are a trader and want to invest in gold there are several different ways you can increase your exposure in gold, however it’s also important to find out amongst all the different options which is the best investment basket for you. If a trader is looking at gold he/she can invest directly through bullion or buying a coin, or indirectly through gold exchange-traded funds, shares, certificates or derivatives.

Gold Exchange Traded Funds is a relatively new concept but since its establishment it has gained huge popularity amongst the traders. One of the top reasons for traders’ inclination towards Gold ETF is, why directly invest in gold and then find a buyer to square off your position if there is a fund doing the same and is being traded on the index based on its Net Asset Value (NAV).

photo credit: BullionVault

So if a trader is looking at Gold ETFs there are set of offerings which one needs to look at and find out which perfectly matches his/her investment portfolio based on his/her sentiments and strategies. Following are types of Gold ETFs available:

1.)    Gold ETFs that own Gold Mining Stocks: The model these ETFs follow is they hold stocks of gold mining companies from around the world.

For example :
Market Vectors Gold Mining ETF (GDX)

2.)    Gold ETFs which actually owns Physical Gold.

For example :
SPDR Gold ETF (GLD)
iShares Comex Gold Trust (IAU)

3.)    Gold Short ETFs: These ETFs believe that Gold will be seeing bearish trend and goes short on gold. So if the gold prices go down Gold Short ETFs prices will go up.

For example:
PowerShares DB Gold Short ETN (DGZ)
PowerShares DB Gold Double Short ETN (DZZ)

4.)    Gold ETFs that own Future Contracts: These funds only invest in Gold future contracts so some of the ETFs only tracks the upward movement in future contracts and some track the complete opposite.

For example:
Powershares DB Gold Fund(DGL)
E-Tracs CMCI Gold Total Return ETN(UGB)

Considering your current investments you can choose the Gold Exchange Traded Funds that best matches your portfolio and your strategy.

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This post via the etf trading blog which is your guide to learn everything related to ETFs trading.

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