For retail investors, there are a few vehicles for exposure to gold. The SPDR Gold ETF (GLD) and the iShares Gold ETF (IAU) are the biggest, lowest cost funds for retail investors. Below are charts of the GLD and the IAU, with price and USD volume overlay to illustrate the liquidity. The GLD ETF trades about $1.5 billion per day currently, while the IAU ETF trades about $250 million per day.
For registered investment companies (RICs, like a mutual fund or ETF) these vehicles are difficult to use for tax reasons. Registered investment companies have to meet income tests, and the income generated by the GLD or IAU is considered “bad income”. Bad income, which includes unrealized capital gains, is capped at 10% of the income of a registered investment company. For this reason, investment funds often prefer to use vehicles that are referred to as passive foreign investment companies (PFICs).
There are at least three gold funds that are popular for registered investment companies looking to gain exposure to gold: 1) Central Fund of Canada (CEF), 2) Sprott Physical Gold ETF (PHYS), and 3) ZKB Gold ETF (ZGLD.US). Assets under management and volumes are noticeably lower, but their fees are similar to the GLD.