Gold ETFs – How to Invest in Gold Through the Stock Exchange? A 2026 Guide

What Are Gold ETFs and Why Have They Gained Popularity

Exchange Traded Funds (ETFs) on gold are exchange-listed funds that track the gold price. Instead of buying physical bars or coins, the investor acquires units of a fund whose assets consist of physical gold stored in professional vaults.

Gold ETFs revolutionised access to this precious metal. Before their appearance (the first – GLD – was launched in 2004), investing in gold required contacting a dealer, organising storage, and bearing significant transaction costs. Today, all you need is a brokerage account and a few clicks.

How Does a Gold ETF Work?

The mechanism is simple:

1. The issuer (e.g. iShares, SPDR, WisdomTree) creates a fund
2. The fund buys physical gold and stores it in certified vaults (usually HSBC, JP Morgan, or similar institutions)
3. Fund units are listed on the exchange and reflect the gold price minus the management fee
4. The investor buys and sells units like ordinary shares

Most gold ETFs are physically-backed – each unit is supported by real gold in a vault. This distinguishes them from ETNs (Exchange Traded Notes), which are debt instruments and carry issuer credit risk.

Key Gold ETFs – Comparison

ETFs Available on European Exchanges

For the Polish investor, ETFs listed on European exchanges (Xetra, London Stock Exchange, Borsa Italiana, Euronext) are most convenient. They are subject to UCITS regulation and do not require the W-8BEN form.

*Xetra-Gold does not charge a management fee but applies a storage fee of 0.36% annually.

ETFs on US Exchanges

Note: When buying US ETFs, Polish investors must file the W-8BEN form and consider estate tax issues (US estate tax). European (UCITS) ETFs are usually the more convenient option.

Xetra-Gold – A Special Case

Xetra-Gold (4GLD) deserves separate discussion. It is a German ETC (Exchange Traded Commodity) that:

• Grants the right to physical gold delivery – you can request bar shipment
• In Germany is tax-exempt after one year of holding (BFH ruling)
• Is denominated in EUR – no USD/PLN risk
• Charges no management fee (TER 0%)

For the Polish investor, the German tax exemption does not apply (the Polish 19% Belka tax applies), but the zero TER and EUR denomination make it an attractive choice.

How to Buy a Gold ETF in Poland – Step by Step

Step 1: Choose a Broker

Polish brokers with access to gold ETFs:

Domestic brokers:

• mBank (eMakler) – access to Xetra, LSE; wide selection of ETFs
• DM BOŚ (Bossa) – access to European and US exchanges
• Biuro Maklerskie PKO BP – access to selected foreign markets

International brokers:

• Interactive Brokers – widest access, lowest commissions for active traders
• Degiro – low costs, simple interface
• XTB – access to ETFs, including synthetic (CFD)
• Saxo Bank – broad offering, higher commissions

Step 2: Choose the ETF

Selection criteria:

1. TER (Total Expense Ratio) – the lower, the better. A 0.1% annual difference amounts to 1% over 10 years
2. Fund size – larger funds have better liquidity and lower spreads
3. Currency – EUR minimises currency risk for the Polish investor
4. Physical backing – prefer physically-backed
5. Availability at your broker – check whether the given ETF is accessible

Recommendation for most Polish investors: Invesco Physical Gold (SGLD) or iShares Physical Gold (IGLN) – low TER (0.12%), large assets, high liquidity, available on Xetra and LSE.

Step 3: Place an Order

The purchase process is identical to buying shares:

1. Log in to your brokerage platform
2. Search for the chosen ETF (e.g. SGLD on Xetra)
3. Specify the number of units or amount
4. Choose order type (limit or market)
5. Confirm the transaction

Step 4: Monitor Your Position

Regularly check the position value and its share in the portfolio. Consider rebalancing when gold allocation deviates by more than 5 percentage points from target.

Gold ETFs Through IKE and IKZE

This is one of the most interesting strategies for the Polish investor. IKE (Indywidualne Konto Emerytalne – Individual Retirement Account) and IKZE (Indywidualne Konto Zabezpieczenia Emerytalnego – Individual Retirement Security Account) offer tax benefits:

IKE:

• No Belka tax (19%) on withdrawal after age 60
• Annual contribution limit: PLN 23,472 (2026)
• Ideal for long-term holding of gold ETFs

IKZE:

• Contributions deductible from PIT tax base
• Flat 10% tax on withdrawal after age 65
• Annual contribution limit: PLN 9,388.80 (2026)

Brokers offering IKE/IKZE with access to foreign ETFs:

• DM BOŚ (Bossa) – IKE and IKZE with broad ETF access
• mBank (eMakler) – IKE with access to foreign exchanges

Strategy: Hold a gold ETF (e.g. 10% allocation) in your IKE. Over a 20-30 year perspective, avoiding the Belka tax means significantly higher final capital.

Costs of Investing in Gold ETFs

Direct Costs

1. TER (management fee): 0.10-0.40% annually – deducted automatically from fund value
2. Brokerage commission: 0.1-0.5% per transaction (depends on broker)
3. Bid-ask spread: 0.01-0.10% – difference between buy and sell price
4. Currency conversion fee: 0.1-0.5% (when buying ETFs in USD or EUR for PLN)

Indirect Costs

1. Tracking error – deviation of ETF price from gold price (usually minimal)
2. Opportunity cost – capital locked up at the broker
3. Currency spread – hidden cost in foreign currency transactions

Cost Comparison: ETF vs Physical Gold

For a PLN 20,000 investment over 10 years:

Gold ETF (TER 0.12%):

• Purchase commission: ~PLN 40 (0.2%)
• Management fee (10 years): ~PLN 240
• Sale commission: ~PLN 40
• Total cost: ~PLN 320 (1.6%)
• Plus 19% Belka tax on gains

Physical gold (1 oz bar):

• Premium over spot: ~PLN 800 (4%)
• Storage (10 years): ~PLN 3,000 (safe deposit box + insurance)
• Spread at sale: ~PLN 400 (2%)
• Total cost: ~PLN 4,200 (21%)
• But no tax on gains (after 6 months)

For small amounts and shorter horizons, the ETF wins. For large amounts and long horizons, zero tax on physical gold may tip the balance.

Gold ETF vs ETC vs ETN – Differences

ETF (Exchange Traded Fund)

• An investment fund in the legal sense
• Assets segregated from the issuer
• Investor protection in case of issuer bankruptcy
• UCITS regulation in Europe
• Example: GLD, IAU

ETC (Exchange Traded Commodity)

• A debt instrument secured by a physical commodity
• Assets usually segregated, but legal structure differs from an ETF
• Popular in Europe (UCITS regulations restrict single-commodity ETFs)
• Example: Xetra-Gold, WisdomTree Physical Gold

ETN (Exchange Traded Note)

• An issuer's debt instrument (note)
• Issuer credit risk – in case of bankruptcy you may lose your investment
• No physical backing (usually)
• Example: Certain structured products on the GPW

Important: Most products on European exchanges colloquially called gold ETFs are technically ETCs. This is not a problem – what matters is physical backing (physically-backed), not the legal classification.

Gold ETF Investment Strategies

Fixed Allocation with Rebalancing

Set a target gold share in the portfolio (e.g. 10%) and rebalance quarterly or annually:

• When gold has risen and constitutes e.g. 14% of the portfolio – sell the excess
• When gold has fallen and constitutes e.g. 7% of the portfolio – buy to target

This mechanical strategy forces buying low and selling high.

DCA (Dollar Cost Averaging)

Regular purchases for a fixed amount – e.g. PLN 500 per month in a gold ETF. Eliminates timing risk and builds the position systematically.

Tactical Allocation

Increasing gold exposure under appropriate market conditions:

• Rising inflation → increase allocation
• Falling real rates → increase allocation
• Geopolitical instability → increase allocation
• Strong equity bull market → reduce allocation (rebalancing)

All Weather Portfolio

Inspired by Ray Dalio's strategy. The gold ETF constitutes 7.5% of the portfolio alongside:

• 30% equities
• 40% long-term bonds
• 15% medium-term bonds
• 7.5% commodities

Risks of Gold ETFs

1. Market risk – the gold price can fall
2. Counterparty risk – minimal for physically-backed ETFs
3. Currency risk – most ETFs are denominated in USD or EUR
4. Regulatory risk – changes in ETF taxation or regulation
5. Liquidity risk – unlikely for large funds but possible for small ones
6. Tracking error – the fund may not perfectly replicate the gold price

Frequently Asked Questions

Is a Gold ETF Safe?

Physically-backed ETFs from large issuers (iShares, Invesco, WisdomTree) are very safe. Gold is physically stored and regularly audited. Counterparty risk is minimal thanks to asset segregation.

Can I Convert an ETF into Physical Gold?

Some products (e.g. Xetra-Gold) offer this possibility, but the minimum quantity is typically 1 bar (approx. 100 g). For most retail investors, this is not practical.

Which Gold ETF for a Beginner?

Invesco Physical Gold (SGLD) on Xetra or LSE – low TER (0.12%), large assets, high liquidity. Alternatively, iShares Physical Gold (IGLN).

Is It Worth Holding a Gold ETF in an IKE?

Yes – it is one of the best strategies. In an IKE you do not pay the Belka tax, which significantly increases the return over the long term.

Planning and Monitoring

Regardless of the chosen ETF, it is essential to track the position in the context of the entire portfolio. Freenance enables monitoring of asset allocation and investment strategy planning with gold and other asset classes in mind.

Summary

Gold ETFs are the most convenient and cheapest way to gain exposure to the gold price. For the Polish investor, European (UCITS) ETFs with low TER, held preferably in an IKE or IKZE, are optimal.

Key principles:

• Choose physically-backed ETFs from large issuers
• Minimise TER – every basis point matters over the long term
• Consider the denomination currency (EUR reduces currency risk vs USD)
• Use IKE/IKZE for tax benefits
• Treat the gold ETF as an element of a broader portfolio strategy, not the only investment

Gold in ETF form is not just an investment – it is a portfolio-stabilising element that gains value precisely when other assets lose.