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ETFs / NewGold, SBAOIL - Help with understanding?

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Contributor
Hi Guys. Can someone help me with the following: How does the price of an ETF (eg: NewGold or SBAOIL) track both the underlying price of the asset (Gold or Oil), and balance market forces. For example, if the gold price is R1100, how is it that the NewGold ETF tracks it. What happens if there is a huge demand for the NewGold ETF - would that not inflate the cost of the ETF relative to the price of Gold due to supply / demand? Or am i over thinking or missing something?
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Contributor
Think it's because the etf physically owns the equivalent amount of asset so if the demand for the etf rises so more asset must be bought , or am I missing something.
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Frequent Contributor
the 2 are suppose to track one another but divergence do occur. Usually its closely correlated but never 100%.

Heres an example of an Oil ETF in $ versus the Oil price in $

https://twitter.com/MktOutperform/status/684935888682369024
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Super Contributor
The instrument issue is kept close to demand. So if there are more redemptions they de-list and if more buyers they list more.
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Contributor
Dont forget the rand/dollar exchange rate also becomes a factor.
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Valued Contributor
the issuer also ensures a market maker who has a constant bid/offer either side of fair value
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