The Differences Between Gold ETF and Digital Gold, Check the Investment Benefits
Business.com, JAKARTA – Gold investment continues to evolve beyond physical gold, with financial sector digitalisation introducing various new instruments that make it easier for investors. Two of the increasingly popular options are digital gold and gold exchange-traded funds (ETFs).
Both are investment instruments that provide exposure to spot gold prices in the market, without the need to store physical gold directly. Although both fall under the digital category, they have different mechanisms, risk profiles, and potential returns.
Digital gold is a form of gold ownership in gram units recorded electronically and backed by physical gold stored by the service provider. In Indonesia, one example is the Gold Savings feature in the Tring app by Pegadaian. Investors can buy gold starting from a minimum of Rp10,000, then store it digitally and accumulate it until it can be printed as gold bars.
On that platform, there is also a gold deposit feature with a minimum of 5 grams and tenors from 1 month to 12 months. The return offered in this deposit is 1% per year.
Looking at the return potential, a simple simulation shows that the yield from gold deposits is relatively limited if not accompanied by a significant rise in gold prices. Assuming a customer places 5 grams of gold for a 12-month tenor with a 1% annual return, the additional gold obtained is only about 0.05 grams. Thus, the total gold ownership at the end of the tenor becomes 5.05 grams.
Using current prices, where the buying price of gold is Rp27,330 per 0.01 gram or equivalent to Rp2.73 million per gram, the initial investment value reaches around Rp13.66 million. Meanwhile, if that gold is sold back at the current price of Rp26,230 per 0.01 gram or about Rp2.62 million per gram, the final value of 5.05 grams is around Rp13.24 million.
This means that, although there is additional return in the form of gold, investors still have the potential to incur a loss of around Rp418,000 if prices do not rise during the tenor period. This occurs due to the wide spread between buying and selling prices, so the 1% annual return is not enough to cover that gap. However, investors will profit if gold prices increase. Based on trends, global gold prices tend to rise in the long term despite fluctuations.
At the market close on Friday (27/3/2026), the spot gold price (XAU) strengthened 2.70% to US$4,494 per ounce. This price level reflects a 4.05% year-to-date (YtD) growth.
Meanwhile domestically, Pegadaian’s gold price is at Rp27,330 per 0.01 gram, or up 11.18% YtD. Measured year-on-year (YoY), Pegadaian’s gold buying price has risen 61% from Rp16,970 per 0.01 gram. Meanwhile, the gold selling price at Pegadaian has risen 59% YoY from Rp16,460 per 0.01 gram to Rp26,230 per 0.01 gram.
If using the assumption of a 61% rise in Pegadaian gold prices over 12 months, the total value of 5.05 grams of gold ownership reaches around Rp21.62 million. Compared to the initial investment value of Rp13.66 million, investors could potentially gain around Rp7.6 million in one year.
Meanwhile, for gold ETFs, in Indonesia the Financial Services Authority (OJK) has recently issued the legal basis in OJK Regulation Number 2 of 2026 concerning Mutual Funds in the Form of Collective Investment Contracts whose Participation Units are Traded on the Stock Exchange with Underlying Assets in the Form of Gold or Gold ETFs.
An existing gold ETF product, for example, traded in the United States, is SPDR Gold Shares (GLD). At the market close on Friday (27/3), GLD rose 3.47% to US$414.49. The price of this gold ETF product has surged sharply within a year from around US$275.
Looking at the risks of both investment instruments, digital gold tends to have a simpler profile compared to gold ETFs. The main risks come from global gold price fluctuations as well as operational risks from the service provider such as storage security and liquidity. However, because it is based on physical gold, this instrument is relatively stable and often seen as a conservative choice for retail investors.
On the other hand, gold ETFs have a more complex risk profile. In addition to exposure to gold price fluctuations, investors also face capital market risks such as intraday price volatility, market liquidity, and potential large outflows from institutional investors that can affect prices. ETFs are also sensitive to macroeconomic factors such as interest rates and US dollar movements.