GOLD and QAU are physically backed. QAU works like this. The ETF purchases physical bullion from a vendor (National Bank of Canada). The gold is then held in the vault of the ETFs custodian (JP Morgan Chase), in London. While the ETF itself does not hold the gold physically, its held by the custodian on behalf of the ETF and is registered to it. The gold is held in individually allocated gold bars in an allocated account which is segregated to the ETF. The custodian maintains a gold holdings list which itemises the bars and includes the individual serial number, weight, refinery and year of casting. An independent bullion audit is conducted at least annually.
Can't remember how GOLD does it exactly, but similar.
However, some of the gold ETFs used offshore are not physically backed. So you have to be careful if you are looking at those.
