Investment Opportunities in Gold ETFs for 2024: A Guide to the Top 6 Funds

Why Gold Continues to Be Relevant in 2024

Gold continues to demonstrate its value as a safe-haven asset during times of uncertainty. Its ability to preserve purchasing power during inflationary periods and its strategic role in central bank reserves make it an attractive option for portfolio diversification. Gold ETFs have emerged as the most accessible way for retail investors to access this precious metal without the complications of physical storage.

Unlike directly owning bars, exchange-traded funds offer significant operational advantages: immediate liquidity, competitive fees, and the ability to trade with small amounts of capital. For 2024, multiple macroeconomic factors make these instruments particularly noteworthy.

Understanding How Gold ETFs Work

A gold ETF functions as an intermediary between the investor and the precious metal. There are two main structures:

Physically Backed Funds: Maintain actual gold reserves stored in vaults of recognized financial institutions. Each share represents a proportional fraction of those reserves. This model offers transparency and minimizes counterparty risk.

Synthetic Funds: Use derivative instruments such as futures and options to replicate gold’s performance. While they may have slightly lower expense ratios, they introduce additional complexities and risks related to the issuer’s solvency.

The choice between these structures depends on each investor’s risk profile and preferences regarding exposure to the underlying asset.

Market Context: Why Now

Geopolitical Factors Drive Demand

Current global tensions—regional conflicts, trade frictions among major powers—have strengthened demand for defensive assets. Historically, gold appreciates when uncertainty prevails. The possibility of significant political changes in 2025 adds volatility to forecasts, benefiting the precious metal.

Interest Rate Outlook

There is a well-documented inverse correlation between gold returns and US interest rates. As central banks cut their benchmark rates, a depreciation of the dollar is expected, making gold more competitive internationally. Simultaneously, lower rates reduce the appeal of fixed income, shifting capital toward alternatives like gold.

Global Debt and Fiscal Sustainability

Public debt levels have reached unprecedented heights since 2008. The US maintains a debt-to-GDP ratio above 129%, while Japan exceeds 260%. This accumulation of fiscal liabilities raises legitimate concerns about the long-term viability of current financial structures. Experts warn of possible reconfigurations in the international monetary system, in which gold could serve as a stabilizer of value.

Gold Supply and Demand Dynamics

Demand for gold comes from four distinct sources that maintain a relatively stable balance:

• Jewelry: Historically the largest consumption category
• Investment: Includes ETF purchases and individual holdings
• Central Banks: Increasing their reserves according to recent surveys
• Technological Applications: From electronics to medical industries

In Q4 2023, global demand exceeded 1,149 tons, not falling below 1,000 tons in the last 14 years. This stability contrasts with supply, which mainly depends on mining activity and recycling—slow-changing factors that provide predictability.

According to surveys by the World Gold Council, 71% of central banks surveyed in 2023 projected increasing their gold reserves over the next 12 months, a trend that partly explains the metal’s appreciation since 2018.

Recent Market Movements

Although gold ETFs experienced net capital outflows in early 2024—particularly in North America—spot gold prices continued to recover. This apparent contradiction is explained by massive central bank purchases and the geopolitical factors mentioned, which more than offset fund disinvestments.

Many investors took advantage of these moments to realize gains and redirect capital toward tech assets or cryptocurrencies at all-time highs. However, this rotation could reverse if stock market volatility increases.

Is Investing in Gold ETFs Worth It?

The decision depends on several personal parameters:

Risk Profile: Conservative investors or those with moderate tolerance find gold a natural complement to their portfolios. Aggressive investors will prefer to focus on higher-yield assets.

Role in the Portfolio: Gold does not generate cash flows like dividends or interest. Its value lies in capital preservation and diversification. Allocating between 5% and 15% of a portfolio to gold is common among professional managers.

Investment Horizon: Although gold experiences short-term volatility, long-term historical data show its capacity to protect wealth over complete market cycles.

Inflation Hedge: Historical data confirm that gold maintains its purchasing power better than most assets during periods of high inflation. With central banks cautious about rate cuts, this function gains renewed importance.

As the tech rally shows signs of consolidation, gold ETFs could provide a defensive balance to concentrated portfolios.

The 6 Most Traded Gold ETFs in 2024

1. SPDR Gold Shares (GLD)

The largest gold fund by assets under management, with $56 billion. GLD tracks the spot price of gold stored in HSBC vaults in London. It trades approximately 8 million shares daily, offering unparalleled liquidity.

Features: 0.40% annual expense ratio. Current price near $202 per share. 6.0% appreciation in 2024.

2. iShares Gold Trust (IAU)

Second in size with $25.4 billion in assets, IAU combines low operating costs with solid historical performance. It backs its holdings with physical gold stored by JPMorgan Chase in London.

Features: 0.25% annual fee. Average daily volume of 6 million shares. Trades around $41 per share with a 6.0% annual increase.

3. Aberdeen Standard Physical Swiss Gold (SGOL)

Specialized fund with gold stored in high-security jurisdictions (Switzerland and the UK). Assets of $2.7 billion with a daily volume of 2.1 million shares.

Features: 0.17% annual fee. Accessible price of $20.86 per share. 6.0% return for the year.

4. Goldman Sachs Physical Gold (AAAU)

Backed by a renowned international financial institution, with custodian JPMorgan Chase. Assets under management of $614 million.

Features: Competitive cost of 0.18% versus the industry average of 0.63%. Trades 2.7 million shares daily. Price of $21.60 per share with a 6.0% annual gain.

5. SPDR Gold MiniShares (GLDM)

A reduced version of the giant GLD, designed for investors seeking maximum cost efficiency. Assets of $6.1 billion with a daily volume of 2 million shares.

Features: Lowest fee among large funds: 0.10% annually. Trades at $43.28 per share. Performance of 6.1% in 2024.

6. iShares Gold Trust Micro (IAUM)

The lowest-cost gold ETF on the market, ideal for retail investors. Assets of $1.2 billion with a daily volume of 344,000 shares.

Features: Expense ratio of just 0.09%. Accessible at $21.73 per share. Up 6.0% since the start of 2024.

Historical Performance Comparison (2009-2024)

Long-term analysis reveals interesting patterns:

• Spot Gold Price: +162.31% since early 2009
• IAU (iShares): 151.19% (best relative performance)
• GLD (SPDR): 146.76% (second place)
• SGOL (Aberdeen): 106.61%
• AAAU (Goldman Sachs): 79.67%
• GLDM (SPDR Mini): 72.38%
• IAUM (iShares Micro): 22.82% (since 2021, shorter period)

Variations reflect differences in accumulated fees, exchange rate changes, and methodological adjustments in price tracking.

Practical Recommendations for Investors in 2024

Clear Objectives: Explicitly define what proportion of your capital will go to gold and for what purpose: protection, diversification, or medium-term speculation.

Balanced Construction: Gold works best as part of a diversified portfolio. Do not concentrate all your defensive exposure in a single asset.

Long-Term Mindset: Short-term volatility can be misleading. Adopt an investment horizon of multiple years to maximize the protective function of the asset.

Contextual Knowledge: Before investing, stay informed about the global macroeconomic situation, especially developments in interest rates, US fiscal policy, and geopolitical dynamics.

Each of the six listed funds offers different features. Your choice will depend on factors such as available initial capital, preference for ultra-low costs versus trading volume, and whether you prioritize simplicity or specialized features.

Investing in gold ETFs is an accessible opportunity to participate in demand for defensive assets without the complexities of physical storage. With an understanding of the main products available and their attributes, it’s time to evaluate whether this alternative fits your wealth strategy for the coming years.