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Gold regained its luster this week, driven by safe-haven demand amid an escalation between Russia and Ukraine tensions. The bullion is on track to post its best week in a year, rising 5% so far. A weaker dollar added to the strength (read: Gold Continues to Glitter: ETFs to Tap Its Safe Haven Appeal).
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 - Free Report) , iShares Gold Trust (IAU - Free Report) , SPDR Gold MiniShares Trust (GLDM - Free Report) , Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL - Free Report) and iShares Gold Trust Micro (IAUM - Free Report) . All these ETFs have risen more than 4% over the past week and have a Zacks ETF Rank #3 (Hold).
Russia-Ukraine Crisis Escalates
Earlier this week, Ukraine employed a U.S.-provided long-range Army Tactical Missile Systems (ATACMS) to strike a Russian ammunition depot in the Bryansk region. This marked the first use of such missiles by Ukraine, following the authorization of former President Joe Biden. The attack resulted in significant damages and secondary explosions at the targeted facility.
In reaction to Ukraine's use of ATACMS, president Vladimir Putin revised Russia's nuclear doctrine. The updated policy permits a nuclear response to conventional attacks on Russia by any nation supported by nuclear power, effectively lowering the threshold for nuclear weapon use. This change has raised concerns about conflict escalation and appeal for safe-haven assets like gold.
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 $71.8 billion and a heavy volume of about 7 million shares a day. SPDR Gold Trust ETF charges 40 bps in fees per year from investors.
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 6 million shares and has an AUM of $32 billion.
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. 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 billion in AUM and trades in a solid average daily volume of 4 million shares.
Aberdeen Standard Physical Swiss Gold Shares ETF tracks the price of gold bullion. The Trust holds allocated physical gold bullion bars stored in secure vaults in Switzerland’s Zurich and the U.K.’s London. Aberdeen Standard Physical Swiss Gold Shares ETF has amassed $3.7 billion in its asset base and trades in a solid volume of 3 million shares per day. It charges 17 bps in annual fees per year.
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 $1.3 billion in its asset base while trading in an average daily volume of 2.5 million shares.
Will the Rally Continue?
The yellow metal has gained almost 30% this year, supported by healthy central bank buying, increasing haven demand and the Fed’s cutting cycle. Most analysts expect gold to rise further, with Goldman Sachs and UBS Group issuing bullish outlooks in recent weeks. Goldman projects gold price to reach $3,000 per ounce by December 2025, whereas UBS expects the yellow metal to rise to $2,900 by the end of next year.
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 October. The central bank slashed rates again by 25 bps this month, bringing down the benchmark rate to 4.5-4.75% (read: Fed Cuts Interest Rate Again: 5 ETFs Likely to Gain).
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.
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Gold ETFs Regain Luster: Will the Rally Continue?
Gold regained its luster this week, driven by safe-haven demand amid an escalation between Russia and Ukraine tensions. The bullion is on track to post its best week in a year, rising 5% so far. A weaker dollar added to the strength (read: Gold Continues to Glitter: ETFs to Tap Its Safe Haven Appeal).
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 - Free Report) , iShares Gold Trust (IAU - Free Report) , SPDR Gold MiniShares Trust (GLDM - Free Report) , Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL - Free Report) and iShares Gold Trust Micro (IAUM - Free Report) . All these ETFs have risen more than 4% over the past week and have a Zacks ETF Rank #3 (Hold).
Russia-Ukraine Crisis Escalates
Earlier this week, Ukraine employed a U.S.-provided long-range Army Tactical Missile Systems (ATACMS) to strike a Russian ammunition depot in the Bryansk region. This marked the first use of such missiles by Ukraine, following the authorization of former President Joe Biden. The attack resulted in significant damages and secondary explosions at the targeted facility.
In reaction to Ukraine's use of ATACMS, president Vladimir Putin revised Russia's nuclear doctrine. The updated policy permits a nuclear response to conventional attacks on Russia by any nation supported by nuclear power, effectively lowering the threshold for nuclear weapon use. This change has raised concerns about conflict escalation and appeal for safe-haven assets like gold.
Gold is often used to preserve wealth during financial and political uncertainty, and usually does well when other asset classes struggle (read: Russia-Ukraine Tensions Revive Interest in Safe ETFs).
ETFs That Gained Most
SPDR Gold Trust ETF (GLD - Free Report)
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 $71.8 billion and a heavy volume of about 7 million shares a day. SPDR Gold Trust ETF charges 40 bps in fees per year from investors.
iShares Gold Trust (IAU - Free Report)
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 6 million shares and has an AUM of $32 billion.
SPDR Gold MiniShares Trust (GLDM - Free Report)
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. 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 billion in AUM and trades in a solid average daily volume of 4 million shares.
Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL - Free Report)
Aberdeen Standard Physical Swiss Gold Shares ETF tracks the price of gold bullion. The Trust holds allocated physical gold bullion bars stored in secure vaults in Switzerland’s Zurich and the U.K.’s London. Aberdeen Standard Physical Swiss Gold Shares ETF has amassed $3.7 billion in its asset base and trades in a solid volume of 3 million shares per day. It charges 17 bps in annual fees per year.
iShares Gold Trust Micro (IAUM - Free Report)
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 $1.3 billion in its asset base while trading in an average daily volume of 2.5 million shares.
Will the Rally Continue?
The yellow metal has gained almost 30% this year, supported by healthy central bank buying, increasing haven demand and the Fed’s cutting cycle. Most analysts expect gold to rise further, with Goldman Sachs and UBS Group issuing bullish outlooks in recent weeks. Goldman projects gold price to reach $3,000 per ounce by December 2025, whereas UBS expects the yellow metal to rise to $2,900 by the end of next year.
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 October. The central bank slashed rates again by 25 bps this month, bringing down the benchmark rate to 4.5-4.75% (read: Fed Cuts Interest Rate Again: 5 ETFs Likely to Gain).
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.