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What's Next for Gold ETFs: A Pullback or Buying Opportunity?
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Supported by strong ETF inflows, a weakening dollar and ongoing central bank buying, gold has climbed 26.62% over the past six months and 61.51% year to date. With 15.14% gains over the past month and 6.54% in just the last five days, it’s shaping up as one of the year’s hottest-performing assets, something investors won’t want to overlook.
Additionally, rising market expectations of further Fed rate cuts, increasing safe-haven demand and strong fundamental indicators could extend gold’s gains into 2026, boosting the case for increased portfolio allocation.
However, despite the strong momentum, the possibility of a near-term price correction cannot be ignored.
Is Gold Poised for a Market Correction?
Per Paul Ciana, a strategist at Bank of America, gold’s eight-week rally could point to near-term weakness, as quoted on Yahoo Finance. BofA’s Michael Widmer also highlighted the risk of a short-term drop that could unsettle investors, even as the long-term trend stays intact.
Per Widmer, as quoted on the abovementioned Yahoo Finance article, while a near-term correction in gold is possible, further gains are expected in 2026, with gold potentially reaching the $5,000 mark. Any wider correction in precious metals will probably be a gradual pullback instead of an abrupt fall.
According to City Index and FOREX.com market analyst, Fawad Razaqzada, as quoted on Reuters, a short-term pullback could shake out weaker hands while creating opportunities for new dip buyers.
What’s Powering Gold to Record Levels?
Amid rising trade frictions between the United States and China, investors are flocking to gold, with Wall Street expecting more gains ahead. Per the abovementioned Reuters article, Washington is considering scaling back trade relations with China, according to President Trump, as markets also watch the ongoing U.S. government shutdown that has stalled official data and may affect policymakers’ perspectives.
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 97.8% likelihood of an interest rate cut in October and a 99.9% likelihood of an interest rate cut in December.
Additionally, with growing concerns about a potential AI bubble, increasing exposure to the yellow metal has become an appealing investment move, highlighting the need to diversify tech-heavy portfolios.
In this context, gold remains an attractive investment option.
How Should You Approach Gold ETF Investing?
Adopting a long-term passive investment strategy becomes the go-to approach for investors to weather short-term market storms. Even if gold prices face a short-term correction, investors shouldn’t be discouraged by potential declines. Instead, they can view the pullbacks as opportunities to buy the dip and strengthen their positions.
Nothing captures what gold means to a portfolio better than Jigna Gibb, Head of Bloomberg Commodity Index Products. She described it as offering investors a sense of comfort, much like a “teddy bear,” during times of uncertainty, as quoted on Yahoo Finance.
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.
ETFs to Consider
The yellow metal continues to remain 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 MiniSharesTrust (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 16.46 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.
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.
With a one-month average trading volume of 25.06 million shares, GDX is the most liquid option. GDX has also gathered an asset base of $22.22 billion, the largest among the other options. Regarding annual fees, SGDM and SGDJ are the cheapest options, charging 0.50%.
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What's Next for Gold ETFs: A Pullback or Buying Opportunity?
Supported by strong ETF inflows, a weakening dollar and ongoing central bank buying, gold has climbed 26.62% over the past six months and 61.51% year to date. With 15.14% gains over the past month and 6.54% in just the last five days, it’s shaping up as one of the year’s hottest-performing assets, something investors won’t want to overlook.
Additionally, rising market expectations of further Fed rate cuts, increasing safe-haven demand and strong fundamental indicators could extend gold’s gains into 2026, boosting the case for increased portfolio allocation.
However, despite the strong momentum, the possibility of a near-term price correction cannot be ignored.
Is Gold Poised for a Market Correction?
Per Paul Ciana, a strategist at Bank of America, gold’s eight-week rally could point to near-term weakness, as quoted on Yahoo Finance. BofA’s Michael Widmer also highlighted the risk of a short-term drop that could unsettle investors, even as the long-term trend stays intact.
Per Widmer, as quoted on the abovementioned Yahoo Finance article, while a near-term correction in gold is possible, further gains are expected in 2026, with gold potentially reaching the $5,000 mark. Any wider correction in precious metals will probably be a gradual pullback instead of an abrupt fall.
According to City Index and FOREX.com market analyst, Fawad Razaqzada, as quoted on Reuters, a short-term pullback could shake out weaker hands while creating opportunities for new dip buyers.
What’s Powering Gold to Record Levels?
Amid rising trade frictions between the United States and China, investors are flocking to gold, with Wall Street expecting more gains ahead. Per the abovementioned Reuters article, Washington is considering scaling back trade relations with China, according to President Trump, as markets also watch the ongoing U.S. government shutdown that has stalled official data and may affect policymakers’ perspectives.
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 97.8% likelihood of an interest rate cut in October and a 99.9% likelihood of an interest rate cut in December.
Additionally, with growing concerns about a potential AI bubble, increasing exposure to the yellow metal has become an appealing investment move, highlighting the need to diversify tech-heavy portfolios.
In this context, gold remains an attractive investment option.
How Should You Approach Gold ETF Investing?
Adopting a long-term passive investment strategy becomes the go-to approach for investors to weather short-term market storms. Even if gold prices face a short-term correction, investors shouldn’t be discouraged by potential declines. Instead, they can view the pullbacks as opportunities to buy the dip and strengthen their positions.
Nothing captures what gold means to a portfolio better than Jigna Gibb, Head of Bloomberg Commodity Index Products. She described it as offering investors a sense of comfort, much like a “teddy bear,” during times of uncertainty, as quoted on Yahoo Finance.
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.
ETFs to Consider
The yellow metal continues to remain 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 16.46 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.
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 25.06 million shares, GDX is the most liquid option. GDX has also gathered an asset base of $22.22 billion, the largest among the other options. Regarding annual fees, SGDM and SGDJ are the cheapest options, charging 0.50%.