Gold Fund


DEFINITION of 'Gold Fund'

A mutual fund or exchange-traded fund (ETF) that invests primarily in gold-producing companies or gold bullion. The price of shares within a gold fund should correlate very closely to the spot price of gold itself, assuming the fund holds the majority of its assets in bullion or in the stocks and bonds of gold miners and manufacturers.


While many mutual funds focus on manufacturing and production stocks within precious metals, a few new ETF entries have focused primarily on ownership of gold bullion. Gold funds are a valuable tool for investors, including speculators (gold can be a very volatile commodity) and those wishing to hedge against geopolitical instability. Gold is also valuable as a bet against a falling currency. By investing in a gold fund, a retail or institutional investor can gain exposure to this asset without the hassle of taking delivery of physical gold assets, which is often required in the commodities market.

  1. Hedge

    Making an investment to reduce the risk of adverse price movements ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Inflation

    The rate at which the general level of prices for goods and services ...
  4. Reverse Gold ETF

    Exchange traded funds that are designed to trade in a direction ...
  5. Gold/Silver Ratio

    A ratio (X:1), demonstrating how many ounces of silver (X) it ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
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