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What are gold ETCs?

January 16, 2012

One Answer

  1. Trustable Gold Posted 

    Gold ETCs (exchange-traded commodities) are investment vehicles that track the performance of an underlying commodity index based on a single commodity. Gold ETCs are asset backed bonds, some of which are collateralised by physical gold. Investors in gold ETCs have a claim for payment against the issuer and do not own any physical gold. Investors in gold ETCs are thus exposed to a counterparty risk.

    In comparison with gold ETCs, investors in vaulted gold have outright ownership in physical gold. In case of an insolvency of a provider of vaulted gold, the property of the investors is protected by law.

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