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Gold logged its biggest annual jump in 2024 since 2010, surging more than 26%, and is set to enjoy another stellar run in 2025. Geopolitical tensions, robust central bank buying and easing of monetary policy by central banks across the globe will continue to add to the glitter of the bullion.
Given the optimism, investors have a long list of options to tap into the metal’s rally. We have highlighted the five most popular options directly linked to the spot gold price or futures to gain exposure to the metal. These are SPDR Gold Trust ETF GLD, iShares Gold Trust IAU, SPDR Gold MiniShares Trust GLDM, abrdn Physical Gold Shares ETF SGOL and iShares Gold Trust Micro IAUM. All these ETFs rose nearly 27% in 2024 and have a Zacks ETF Rank #3 (Hold) each.
The tensions between Russia and Ukraine and any slowdown concerns will continue to raise the appeal for safe-haven demand. Gold is often used to preserve wealth during financial and political uncertainty, and usually does well when other asset classes struggle.
After holding the rates at a 23-year high for 14 consecutive months since July 2023, the Fed kicked off the new rate cycle era by initiating a 50-basis point interest rate cut in September. The central bank then slashed rates two times by 25 bps each over the past couple of months and projected two rate cuts in 2025. Lower rates raise the yellow metal’s attractiveness compared with fixed-income assets such as bonds. Notably, gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity costs of holding non-yielding bullion.
Meanwhile, strong demand from both central banks and individual investors in emerging markets, such as India and China, are acting as major tailwinds for the precious metal. Further, being considered a hedge against inflation, gold is set to benefit from President-elect Donald Trump's expansionary policies, which could reignite inflationary pressures, though it will push the U.S. dollar higher (read: 5 Sector ETFs That Crushed the Market in 2024).
ETFs in Focus
SPDR Gold Trust ETF (GLD)
SPDR Gold Trust ETF tracks the price of gold bullion measured in U.S. dollars and kept in London under the custody of HSBC Bank USA. It is an ultra-popular gold ETF with an AUM of $73.2 billion and a heavy volume of about 6 million shares a day. SPDR Gold Trust ETF charges 40 bps in fees per year from investors.
iShares Gold Trust (IAU)
iShares Gold Trust offers exposure to the day-to-day movement of the price of gold bullion. It is backed by physical gold under the custody of JP Morgan Chase Bank in London. iShares Gold Trust charges 25 bps in annual fees. It trades in average daily volumes of 5 million shares and has an AUM of $33 billion (read: Gold ETFs Regain Momentum: Will the Rally Continue in 2025?).
SPDR Gold MiniShares Trust (GLDM)
SPDR Gold MiniShares Trust seeks to reflect the performance of the price of gold bullion. It is a slightly modified alternative to the State Street behemoth gold fund GLD and is kept under the custody of ICBC Standard Bank Plc and JPMorgan Chase Bank. SPDR Gold MiniShares Trust is a low-cost choice in the U.S. listed physically gold-backed ETF space, charging investors 10 bps in annual fees. It has $9.2 billion in AUM and trades in a solid average daily volume of 3 million shares.
abrdn Physical Gold Shares ETF (SGOL)
abrdn Physical Gold Shares ETF tracks the price of gold bullion. The Trust holds allocated physical gold bullion bars stored in secure vaults in London. abrdn Physical Gold Shares ETF has amassed $3.7 billion in its asset base and trades in a solid volume of 4 million shares per day. It charges 17 bps in annual fees per year.
iShares Gold Trust Micro (IAUM)
iShares Gold Trust Micro offers exposure to the day-to-day movement of the price of gold bullion. It is the lowest-cost gold ETF on the market, having an expense ratio of 0.09%. iShares Gold Trust Micro has amassed $1.4 billion in its asset base while trading in an average daily volume of 2.7 million shares.