After a lull last month, gold appears to be gaining momentum again at the start of August. This is especially true as the yellow metal logged its longest stretch of gains since February, rising more than 3% over the past four days. Fears of a U.S. economic slowdown, weak labor and services sector data, and increased expectations of Fed rate cuts have buoyed sentiment in the bullion.

With the rise in bullion prices, ETFs linked to the spot gold price or futures are also set to shine. Some of the most popular plays in the ETF space are SPDR Gold Trust ETF (GLD Quick QuoteGLD - Free Report) , iShares Gold Trust (IAU Quick QuoteIAU - Free Report) , SPDR Gold MiniShares Trust (GLDM Quick QuoteGLDM - Free Report) , abrdn Physical Gold Shares ETF (SGOL Quick QuoteSGOL - Free Report) and iShares Gold Trust Micro (IAUM Quick QuoteIAUM - Free Report) . These funds have a Zacks ETF Rank #3 (Hold) each.

Weak Economic Data

Poor job growth, a sluggish services sector in July and downward revisions of prior data raised recession fears. The economy added just 73,000 jobs in July, well below the 104,000 expected. Adding to concerns, job gains for the prior two months were revised sharply lower by a combined 258,000, and the unemployment rate ticked up to 4.2%.

Meanwhile, the U.S. services sector came to a near standstill in July, as businesses, grappling with weak demand and rising costs, cut back on hiring. The Institute for Supply Management’s services index slipped to 50.1 last month from 50.8 in June.

Rate Cut Bets Rise

The weak report raised the odds for the Federal Reserve to lower interest rates when it next meets in September. The CME FedWatch and Polymarket suggest a high likelihood of about 92% of a U.S. rate cut next month, based on weakening jobs and dovish sentiment from Fed officials. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, increasing its attractiveness over fixed-income investments such as bonds (read: Gold ETFs to Remain Strong Despite the Stock Market Rally).

Return of Tariffs

Trump unveiled sweeping tariff hikes last week, shaking the stock markets and reigniting a fresh wave of safe-haven buying. The Trump administration slapped higher tariffs on dozens of countries, including key partners like Taiwan, India and Canada, with most levies ranging between 15% and 40%, though the baseline remains 10%. Tariffs on Canadian imports will jump to 35%, effective immediately, while others are scheduled to take effect this week.

This has lured investors to shift to defensive investments. Gold is often used to preserve wealth during financial and political uncertainty and usually does well when other asset classes struggle. Additionally, the inflationary pressure caused by new tariffs will benefit the precious metal's status as a hedge against rising prices.

Weak Dollar & Central Bank Purchase

A weaker dollar and sustained central bank buying are also driving gold price higher. The central banks are dominant buyers of gold as they seek to diversify their reserves away from the U.S. dollar. According to a recent survey conducted by the World Gold Council, about 95% of central banks believe their gold reserves will increase over the next 12 months.

Citigroup Raises Gold Forecasts

Citigroup raised its 3???month gold forecast to $3500 from $3,300 per ounce, citing the crumbling U.S. economy, rising inflation and ever-changing tariffs.

ETFs in Focus

SPDR Gold Trust ETF (GLD Quick QuoteGLD - 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 $103 billion and a heavy volume of about 9 million shares a day. SPDR Gold Trust ETF charges 40 bps in fees per year from investors (read: 5 ETFs With Big Inflows Last Week on S&P 500's Record Rally). 

iShares Gold Trust (IAU Quick QuoteIAU - 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 $33 billion.

SPDR Gold MiniShares Trust (GLDM Quick QuoteGLDM - 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 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 $16.2 billion in AUM and trades in a solid average daily volume of 3 million shares.

abrdn Physical Gold Shares ETF (SGOL Quick QuoteSGOL - Free Report)

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 $5 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 Quick QuoteIAUM - 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 $3.3 billion in its asset base while trading in an average daily volume of 2.8 million shares.

Bottom Line

With economic uncertainty prevailing and Fed rate cuts on the table, investor interest in gold ETFs is likely to remain strong in the months ahead.