Newly launched gold-based exchange traded funds have spurred demand for the yellow metal and kept prices high, the head of the world's fifth largest gold miner said on Thursday, Reuters reports.

Gold ETFs offer a share in a bar of gold and are traded on stock exchanges across the globe, including the London, New York, Sydney and Johannesburg, the report said.

"It's been hugely successful in generating a demand for gold. It certainly has increased the price. It has offered alternative to [other] investments," said Peter Tomsett, chief executive of Placer Dome at the Reuters Mining Summit in New York.

Disappointed by the performance of stocks and bonds, money managers have increasingly poured money into commodities in recent years in the hopes of capturing high returns, Reuters added.

Gold is often used to complete a well-diversified portfolio or as a hedge against other asset classes.

ETFs serve as an alternative to investing directly in commodities, which carries greater risk, and can be bought and sold at any time, making them much more liquid than owning physical gold.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.