Investing in gold has long been viewed as a way to diversify investment portfolios and hedge against inflation. With the advent of exchange-traded funds (ETFs), gaining exposure to gold has become easier than ever for European investors. This guide will explore how to buy gold ETFs in Europe and provide a step-by-step walkthrough of the gold ETF investment process.
Summary
Gold ETFs allow investors to track the performance of gold bullion without needing to physically own gold bars or coins. Two of the most popular gold ETFs trading in Europe are the SPDR Gold Shares ETF (GLD) and the Xtrackers Physical Gold ETC (XGBT). The GLD aims to reflect the performance of gold bullion prices, making it a relatively straightforward way to invest in gold. Meanwhile, the XGBT holds physical gold bars stored in secured vaults, offering direct exposure to gold.
When looking to buy gold ETFs in Europe, eToro stands out as a top choice. eToro offers European users a seamless experience to invest in leading gold ETFs like GLD and XGBT alongside over 3,000 other stocks and ETFs. The platform is regulated across Europe, including by the UK’s Financial Conduct Authority (FCA) and Cyprus Securities and Exchange Commission (CySEC).
What are Gold ETFs?
Gold ETFs are funds that track the price of gold. The two most popular options for European investors are SPDR Gold Shares (GLD) which tracks physical gold prices, and VanEck Vectors Gold Miners ETF (GDX) which focuses on gold mining companies. GLD allows straightforward exposure to gold prices while GDX provides an opportunity to invest in the mining industry for specialized gains. Their high trading volumes ensure excellent liquidity.
How to Buy Gold ETFs in Europe
Follow these simple steps to buy gold ETFs in Europe using eToro:
Step 1: Research and Analysis
Begin by thoroughly researching GLD and GDX on the companies’ websites and independent research platforms. Check their financial reports, management details, ETF factsheets for investment objectives. Understand how they work and suit your risk profile by following gold market experts on social media.
Step 2: Select eToro brokerage
eToro is the top recommended platform by experts for its diverse range of over 3000 assets including GLD and GDX, regulation across major EU countries, very low spreads from 0.15%, and user-friendly interface. It allows instant deposits from Euro bank accounts.
Step 3: Fund your eToro account
Sign up on eToro and complete account verification. Click ‘Deposit Funds’ and select EUR to deposit from your bank via SEPA transfer. eToro also accepts several debit/credit cards with no fees. The minimum deposit amount is €50.
Step 4: Determine shares to buy
Decide your investment amount and divide by current GLD/GDX share price displayed on eToro. Consider allocating 25-40% of funds to GLD for safe gold exposure and the rest to GDX for growth opportunities in mining companies.
Step 5: Place order on eToro
Search GLD or GDX on eToro platform. Click ‘Buy’ and specify number of shares to purchase using your available funds balance. Confirm order details before submission.
Step 6: Review and confirm
Cross-check order details including share quantity, limits, and costs. Confirm to execute the transaction through eToro for instant order placement.
Step 7: Monitor your investment
Stay updated on gold prices and company developments through research. Log in to eToro regularly to track investment performance against your targets.
Step 8: Reassess and adjust strategy
Review portfolio quarterly and rebalance allocations if required. Consider selling portions of outperformers to book profits and use it for other opportunities.
Fees for Buying Gold ETFs
A key advantage of using eToro is its competitive fees compared to other European platforms. For gold ETFs, typical fees include small spreads of around 0.14% and no commission charges. There are also no account management or inactivity fees. This makes eToro a cost-effective way to invest in gold.
Taxes on Investing in Gold ETFs
In terms of taxes, how gold ETF investments are taxed can vary across European countries. For example, in Germany, gold ETFs may be subject to a 25% capital gains tax if shares are sold before being held for over a year. Always check your local tax laws on investing.
Conclusion
To recap, investing in gold ETFs like GLD and XGBT is straightforward for European investors via regulated platforms like eToro. By following the outlined steps, keeping fees low, and understanding tax implications, you can include gold in your investment portfolio as a strategic diversification and inflation hedge.
FAQs
Where can I buy gold ETFs in Europe?
You can buy gold ETFs such as GLD and XGBT on regulated trading platforms like eToro that serve European users. eToro makes it easy to fund accounts with Euros and invest in leading gold ETFs alongside stocks, crypto, and more.
How do I buy SPDR Gold shares in Europe?
Purchasing shares of the SPDR Gold ETF is simple on eToro. Just open and fund an account, search for “GLD” using the platform’s search bar, set your order details, and execute your trade. Ongoing monitoring is key after establishing your position.
What are the best gold ETFs in Europe?
The SPDR Gold Shares ETF (GLD) and Xtrackers Physical Gold ETC (XGBT) are among the best and most liquid gold ETFs in Europe. The GLD closely tracks gold bullion prices while the XGBT stores physical gold bars on behalf of investors. Both offer easy exposure to gold.
What is the cost of trading gold ETFs in Europe?
When using eToro to trade gold ETFs in Europe, typical costs include small bid-ask spreads around 0.14% or less. There are no commission fees, account charges, or monthly maintenance costs. This makes eToro a very cost-effective platform for investing in gold.
