The introduction of gold-backed ETPs, which trade like equities, gave access to the metal without the need for arranging storage or dealing in derivatives. One futures contract traded on the Comex bourse in New York, equal to 100 ounces, costs $123,460 while a share in the SPDR Gold Trust, representing 0.1 ounce, is valued at $119.38.

ETPs backed by gold were created by Graham Tuckwell, a Canberra, Australia-born entrepreneur who persuaded the producer-funded World Gold Council to back the proposal after the Australian Gold Council rejected his plan in 2002. The products are cheaper and more transparent than mutual funds, Tuckwell said in an interview with Bloomberg News last year.

Gold Jewelry

Tuckwell’s ETF Securities Ltd. oversees the second-largest gold-backed ETP, according to data compiled by Bloomberg. Zuercher Kantonalbank, Switzerland’s biggest state-owned regional bank, and BlackRock Inc., the world’s leading money manager, are the next-largest operators.

“Gold ETPs are preferred by a lot of people because at the end of the day it’s easier to trade and easier to manage your portfolio,” said Francisco Blanch, the head of commodities research at Bank of America Corp. in New York. “And it’s probably cheaper. If you buy physical bars, you have the cost of the bar, but you also may have to pay for storage of the physical bar. The ETP does all of that for you.”

Asian Jewelry

In Asia, where many buy jewelry as a form of investment, the cost to consumers is higher. At a store of SK Jewellery Pte Ltd. in central Singapore, a gram of 99.9 percent purity, cost S$62.50 ($50) on Dec. 11. That’s equivalent to about $1,555 an ounce, 24 percent more than the London spot price that day. A 1- ounce coin at United Overseas Bank Ltd., Southeast Asia’s third- largest lender, was on sale for S$1,640 an ounce ($1,310) the same day, according to its website.

Some of the economic conditions that prompted investors to buy gold over the past few years no longer exist. The U.S. unemployment rate that touched a 26-year high of 10 percent in October 2009 after a recession in the world’s largest economy dropped last month to a five-year low of 7 percent, the government reported Dec. 6. The U.S. economy grew at an annual rate of 3.6 percent in the third quarter, the strongest in 18 months. Inflation in the U.S. is running at a 1 percent annual rate, half the pace of the past decade.

“Inflationary pressures are not strong,” said Peter Richardson, the Melbourne-based chief metals economist at Morgan Stanley. “We’re certainly not buyers” of gold, he said.

The Standard & Poor’s 500 Index rose 25 percent this year, heading for the biggest annual gain since 2003. The SPDR S&P 500 ETF Trust is now valued at $164.5 billion, compared with $33 billion for the SPDR Gold Trust.