Physical Gold in ETFs: The Ultimate Guide for 2024 and the 6 Most Profitable Options

Why Does Physical Gold Backed by ETFs Become the Preferred Choice?

Gold has historically been a safe haven during times of uncertainty. Unlike accumulating bars at home, physical gold ETFs offer a modern alternative: access to the precious metal without the risks of physical custody. These structures hold real bars in certified vaults while allowing trading on stock exchanges with minimal commissions.

In 2024, three factors converge to reignite interest:

Global geopolitical tensions. Conflicts in Europe, the Middle East, and tensions among superpowers boost demand for defensive assets. Physical gold maintains its value when markets destabilize.

Expectations of interest rate cuts. When the Fed lowers rates, the dollar tends to weaken, and gold (priced in USD) becomes cheaper internationally, attracting higher demand. This also reduces the appeal of bonds and fixed income.

Unsustainable global debt. The US operates with a debt-to-GDP ratio of 129%, Japan with 263.9%. This accumulation of liabilities fuels doubts about the stability of the current monetary system, positioning physical gold as a safe hedge against future revaluations.

Physical vs Synthetic Gold: What’s the Difference?

There are two main categories of ETFs:

Physical gold: The fund acquires real bars stored in vaults of institutions like HSBC or JP Morgan in London or Switzerland. Each share represents a fractional ownership of that asset. This eliminates counterparty risk.

Synthetic gold: Operates through derivatives (futures, options) that replicate price movements without physical holding. It offers slightly lower fees but introduces issuer solvency risk.

For conservative investors, physical gold is the most transparent and secure option.

Changes in Capital Flows: Are Investors Exiting?

According to the World Gold Council, between January and February 2024, gold ETFs recorded net outflows of $2.9 billion globally, with North America accounting for $2.4 billion. This might seem negative, but the context tells a different story:

• Gold prices have been trending upward since October 2022
• Many investors took profits to reinvest in tech assets and Bitcoin (more profitable short-term opportunities)
• Underlying demand from central banks and mining remains robust

The outflows reflect tactical rotation, not a loss of confidence.

Central Banks Drive Institutional Purchases

71% of 57 central banks surveyed in 2023 planned to increase gold reserves in the next 12 months, up from 61% in 2022. This trend explains much of the rise since 2018.

Why do central banks buy? Gold offers:

• Intrinsic value security (not dependent on political trust)
• International liquidity
• Currency diversification (especially exiting the dollar)

The largest global holders are the United States, Germany, Italy, France, Russia, China, Switzerland, India, and the Netherlands. This institutional demand supports price floors.

Gold Demand Comes from 4 Different Sources

The price stability of physical gold is explained by demand diversification:

In Q4 2023, 1,149.8 tons were consumed:

• Jewelry: 581.5 tons (50.5%)
• Investment: 258.3 tons (22.5%) — here, physical gold ETFs play a decisive role
• Central banks: 229.4 tons (19.9%)
• Technology: 80.6 tons (7%)

Mining + recycling supply cannot change radically in the short term, creating a certain balance. Demand rarely falls below 1,000 tons in 14 years.

The Top 6 Physical Gold ETFs in 2024

( 1. SPDR Gold Shares ETF )GLD###

The undisputed market leader. Manages $56 billion and trades 8 million shares daily.

• Custodian: HSBC Bank USA (London)
• Annual fee: 0.40%
• Current price: $202.11 per share
• 2024 performance: +6.0%
• Historical return (2009-2024): 146.76%

( 2. iShares Gold Trust ETF )IAU###

Second most popular fund, with lower fees and superior performance.

• Custodian: JP Morgan Chase Bank (London)
• Annual fee: 0.25%
• Assets: $25.4 billion
• Daily volume: 6 million shares
• Price: $41.27 per share
• 2024 performance: +6.0%
• Historical return (2009-2024): 151.19% (highest)

( 3. Aberdeen Physical Gold Shares ETF )SGOL###

Alternative with gold stored in Switzerland and the UK, accessible at a lower price.

• Custodian: Vaults in Switzerland and UK
• Annual fee: 0.17%
• Assets: $2.7 billion
• Daily volume: 2.1 million shares
• Price: $20.86 per share (cheapest on the list)
• 2024 performance: +6.0%
• Historical return (2009-2024): 106.61%

( 4. Goldman Sachs Physical Gold ETF )AAAU###

Backed by a top-tier financial institution.

• Custodian: JPMorgan Chase Bank (UK)
• Annual fee: 0.18% (much below the average of 0.63% for commodity ETFs)
• Assets: (millions
• Daily volume: 2.7 million shares
• Price: $21.60 per share
• 2024 performance: +6.0%
• **Historical return )2009-2024$614 **: 79.67%

( 5. SPDR Gold MiniShares ETF )GLDM###

Low-cost version of State Street’s GLD.

• Annual fee: 0.10% (more competitive)
• Assets: $6.1 billion
• Daily volume: 2 million shares
• Price: $43.28 per share
• 2024 performance: +6.1%
• Historical return (2009-2024): 72.38%

( 6. iShares Gold Trust Micro ETF )IAUM###

The lowest-fee physical gold ETF on the market.

• Annual fee: 0.09% (the lowest available)
• Assets: $1.2 billion
• Daily volume: 344,000 shares
• Price: $21.73 per share
• 2024 performance: +6.0%
• Historical return (since 2021): 22.82%

Comparative Performance: 2009-2024

Over the past 15 years, these ETFs have demonstrated resilience:

• Spot gold: +162.31%
• IAU (best): +151.19%
• GLD: +146.76%
• SGOL: +106.61%
• AAAU: +79.67%
• GLDM: +72.38%
• IAUM (recent): +22.82% since 2021

Is Investing in Physical Gold Worth It in 2024?

The answer depends on your profile:

If your risk tolerance is low or medium, physical gold ETFs offer:

• Diversification that cushions stock losses
• Protection in volatile markets (safe haven asset)
• Hedge against future inflation if central banks return to expansionary policies

If your tolerance is high, you might prefer to concentrate capital in assets with higher return potential (technology, cryptocurrencies).

Macroeconomic Considerations Reinforcing the Gold Thesis

Global debt has reached unsustainable levels. Governments financed growth through liabilities, with poor results. Jerome Powell, Fed Chair, recently acknowledged: “The US is on an unsustainable fiscal path. Debt is growing faster than the economy.”

While a crisis is not imminent, this official recognition suggests that:

• Inflationary pressures could return
• Revaluations of safe assets are likely
• Physical gold in ETFs will be one of the best tools to shield portfolios

Recommended Strategy for Investing in 2024

Set clear objectives: Are you protecting a diversified portfolio or seeking speculation?

Size your position: Don’t concentrate everything in gold. A 5-15% position in physical gold ETFs complements stock and fixed income portfolios well.

Choose according to profile:

• Maximum liquidity: GLD or IAU
• Minimal fees: GLDM or IAUM
• Balanced approach: SGOL or AAAU

Invest long-term: Short-term prices fluctuate. Gold is more effective as a multi-year hedge.

Study macroeconomic context: Good times for gold coincide with inflation, geopolitical conflicts, or dollar weakening. Bad times align with tech bull markets and high interest rates.

Conclusion: Physical Gold Deserves a Place in Your Portfolio

Physical gold ETFs democratize access to the precious metal for retail investors. With fees near 0.10%, daily liquidity, and backing from certified institutions, they eliminate the complexities of traditional gold.

In an environment of unsustainable global debt, geopolitical tensions, and potential monetary policy shifts, holding a defensive position in physical gold is not paranoia. It’s prudence.

The final decision is yours: do you protect your wealth now, or wait until evident crises force everyone to seek refuge simultaneously?