Gold has long been seen as a safe-haven asset, used as a store of value in uncertain times. For modern UK investors, one of the easiest ways to get exposure to gold is through something called a gold exchange-traded commodity (ETC).
Key takeaways
Gold ETCs allow you to easily add some gold exposure to your portfolio.
Because they trade on exchanges, you can access gold ETCs with all of the best trading apps and platforms.
Keep an eye on the ongoing fees, and whether the gold ETC is physically-backed or synthetic.
Best gold ETCs for UK investors
Performance of most gold ETCs (whether physically-backed or synthetic) tracking the spot price of gold, should have relatively similar performances. However, the providers and fees can differ.
Here’s how some of the largest and most-traded gold ETCs available to UK investors compare.
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How to invest in gold ETCs
Open a share dealing account. The first step in investing in Gold ETCs is to open a share trading account. Choose a platform that suits your needs and open an account.
Fund your account. Once your account is open, deposit funds via bank transfer, debit card, or another method supported by your platform.
Research and choose a gold ETC. You can compare gold ETCs on metrics like fees, fund structure, vault location, and liquidity. You can then search for them on your platform by name or ticker symbol.
Buy your ETC. When you’ve selected your preferred gold ETC, decide how much to invest and create an order to buy shares, and that’s it!
What is a gold ETC?
A gold ETC (exchange-traded commodity) is a type of investment asset that tracks the spot price of gold and it’s traded on a stock exchange, just like shares in companies.
Each ETC is typically backed by physical gold bars kept in secure vaults, not in Gringotts or Smaug’s lair; you’ll usually find them under lock and key in London or Zurich.
Gold ETCs are structured as debt securities, but they’re backed by physical gold or collateral designed to mirror the gold spot price.
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Why are they popular?
Gold ETCs are particularly popular in the UK and Europe because they provide an alternative to single-commodity gold ETFs, which certain regulators aren’t big fans of.
So, ETCs fill this demand gap, giving investors a straightforward way to access gold markets via the stock exchange.
Where can you invest in gold ETCs?
You should be able to find at least one gold ETC on all the best trading apps. However, it’s worth noting that some platforms will stock more gold ETCs than others. So it’s always worth double-checking that your platform of choice also has the investment you want.
above are some of the best investing platforms available to UK investors, with the ability to hold gold ETCs in your portfolio.
Why invest in gold ETCs?
Gold ETCs can be used for a range of reasons if you’re attempting to conduct a diversified portfolio:
Hedge against inflation. Gold often holds its value when currencies weaken.
Diversification. Gold can reduce your overall portfolio volatility.
Accessibility. Ability to invest in gold without needing to store or insure it.
Liquidity. These products are easily traded on major exchanges and investment platforms.
Affordability. No need to buy whole gold bars, you can invest in ETC shares instead, which are priced differently to weighted gold.
Our expert says: Do you pay tax on gold ETCs?
"It depends. In some cases, yes. Unlike certain gold coins, gold ETCs don’t qualify as legal tender so you may have to pay capital gains tax (CGT) on any profits.
However, you can avoid having to pay tax entirely by holding your gold ETC in a tax-efficient wrapper like a stocks and shares ISA or a self-invested personal pension (SIPP). "
Traded like regular shares on major stock exchanges
Physically backed options provide real gold exposure
Can help diversify your portfolio and hedge against inflation
Cons
No dividends or income, returns rely on the price of gold
Exposure to issuer or counterparty risk (especially for synthetic ETCs)
Some are priced in USD or EUR, meaning currency risk
Not the same as owning physical gold directly
Bottom line
A Gold ETC offers a simple, efficient, and cost-effective way to invest in gold without needing to bury bars in your backyard. Instead, you can access gold ETCs listed on stock exchanges, right at your fingertips.
They can be a smart addition to a diversified portfolio, particularly for investors seeking a hedge against inflation or economic uncertainty. However, it’s worth understanding that all that glitters is not gold, you’re still investing in a volatile commodity with risks like currency movements and issuer exposure.
Frequently asked questions
Most Gold ETCs don't allow retail investors to exchange their holdings for physical gold. However, certain options like the Royal Mint Physical Gold ETC (RMAU) may offer the option to redeem shares for gold bars or coins.
Gold ETCs are generally considered lower-risk compared to equities because they track the value of a tangible asset.
However, they still carry issuer and counterparty risk, especially if not fully backed by physical gold. Always check whether your chosen ETC holds allocated gold in secure vaults.
No. Gold doesn't generate income or interest, so Gold ETCs do not pay dividends. Returns come purely from changes in the gold price.
Yes, many Gold ETCs are eligible to be held in stocks and shares ISA or SIPP. Holding them in these wrappers can shield your gains from CGT, you just need to check your platform offers gold ETCs and a tax-efficient account to hold them in.
A physically backed gold ETC holds real gold bars in vaults, providing direct exposure to the metal's price. A synthetic ETC uses derivatives to track gold's performance, which can introduce additional counterparty or credit risk.
George is a deputy editor at Finder. He has previously written for The Motley Fool UK, Nasdaq, Freetrade, Investing in the Web, MoneyMagpie, Online Mortgage Advisor, Wealth, and Compare Forex Brokers.
He's focused on making personal finance and investing engaging for everyone. To do this he draws from previous work and his Level 4 Diploma for Financial Advisers (DipFA), sharing what he’s learnt. When he’s not geeking out about money, you’ll find him playing sports and staying active.
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