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ETFs to Consider as Gold Breaks the $4,000 Barrier

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Driven by strong investor inflows into gold ETFs, a weaker dollar and sustained central bank buying, gold price has gained 27.01% over the past six months and 53.85% year to date. Breaching the $4,000 mark for the first time, the yellow metal stands out as one of the best-performing assets of the year.

Additionally, rising market expectations of further Fed rate cuts, persistent political and geopolitical tensions and strong fundamental indicators could extend gold’s gains into 2026, boosting the case for increased portfolio allocation.

The U.S. government shutdown entered its eighth day on Wednesday, adding to the already uncertain economic environment in the country. In this context, gold remains an attractive investment option.

According to Ray Dalio, as quoted on CNBC, investors should allocate up to 15% of their portfolios to gold, as the yellow metal surged past the $4,000 mark, contradicting the more traditional investment advice of limiting allocation to alternative asset classes such as commodities to single-digit percentages.

Gold Rallies as Markets Price in Fed Easing

Interest rate cuts by the Fed weaken the U.S. dollar, boosting demand for gold and pushing its price upward as it becomes more affordable for buyers holding other currencies. Per the CME FedWatch tool, markets are anticipating a 94.6% likelihood of an interest rate cut in October and a 99.3% likelihood of an interest rate cut in December, lower than earlier expectations.

Projections Turn Bullish

According to Reuters, Goldman Sachs and UBS have raised their price forecasts for the yellow metal, driven by ETF inflows, prospects of lower U.S. rates and central bank demand.

Per Yahoo Finance, investor demand for ETFs surged in September, with gold-backed funds seeing their largest inflows in the month in over three years. According to the abovementioned Yahoo Finance article, Goldman Sachs revised its December 2026 gold price projection higher, raising it to $4,900 per ounce from $4,300.

ETFs to Consider

The yellow metal remains a crucial hedge for investors amid growing macroeconomic and geopolitical uncertainty.  Below, we highlight a few funds where investors can increase their allocation to gain greater exposure to gold.

Physical Gold ETFs          

Investors can consider SPDR Gold Shares (GLD - Free Report) , iShares Gold Trust (IAU - Free Report) , SPDR Gold MiniShares Trust (GLDM - Free Report) , abrdn Physical Gold Shares ETF (SGOL - Free Report) and iShares Gold Trust Micro (IAUM - Free Report) to increase their exposure to the yellow metal.

With a one-month average trading volume of 14.48 million shares, GLD is the most liquid option, ideal for active trading strategies. However, implementing an active strategy in the current landscape may not be the most effective approach.

Adopting a long-term passive investment strategy becomes the go-to approach for investors to weather short-term market storms. Investors should not be discouraged by any likely decline in gold prices. Rather, they should adopt a "buy-the-dip" strategy.

GLD has gathered an asset base of $128.64 billion, the largest among the other options. Performance across all funds has been mostly consistent over the past month and the past year. Regarding annual fees, GLDM and IAUM are the cheapest options, charging 0.10% and 0.09%, respectively, which makes them more suitable for long-term investing.

Gold Miners ETFs

These ETFs focus on gold miners, usually magnifying gold’s gains and losses. They provide access to the gold mining industry, not the commodity’s price.

Investors can consider VanEck Gold Miners ETF (GDX - Free Report) , Sprott Gold Miners ETF (SGDM - Free Report) , VanEck Junior Gold Miners ETF (GDXJ - Free Report) and Sprott Junior Gold Miners ETF (SGDJ - Free Report) .

With a one-month average trading volume of 24.21 million shares, GDX is the most liquid option. GDX has also gathered an asset base of $22.96 billion, the largest among the other options. Regarding annual fees, SGDM and SGDJ are the cheapest options, charging 0.50%.

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