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Guide to Gold ETF Investing

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Key Takeaways

  • A potential end to the Iran war could ease inflation and interest rate pressures, supporting gold.
  • Central-bank buying and reserve diversification remain key long-term tailwinds for gold.
  • AI bubble concerns and geopolitical risks could renew safe-haven demand for gold ETFs.

Gold has been subdued in the year-to-date frame, with much of the selloff coming over the past six months. Higher rates and a strong U.S. dollar have faded the yellow metal’s allure. Gold bullion ETF SPDR Gold Trust (GLD - Free Report) is down about 10% over the past six months (as of Nov 4, 2026), while it is off about 7% so far this year.

Meanwhile, Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) has gained 5.2% in the past six-month frame and is up 7% year to date.

What lies ahead of gold ETFs as Democrats take control of Congress?

Iran War to End Soon and Ease Inflation?

Vice President JD Vance blamed the war against Iran for the Republican midterm election loss. Democrats secured control of both the House and Senate in Tuesday’s elections, giving the party greater influence to pressure President Donald Trump to end the unpopular war, which has driven up gasoline and diesel prices.

If inflation can be managed, the Fed may not hike rates as fast as previously thought. Gold prices tend to move inversely to interest rates. When interest rates decline, non-interest-bearing gold becomes more attractive as it competes more favorably with interest-bearing investments like bonds.

Central Banks Are Turning to Gold

One of the biggest reasons why gold could remain resilient despite higher rates is central-bank demand.

Central banks have been placing greater emphasis on gold as part of their reserve strategies. They have increased gold purchases since 2022, when G7 nations froze Russian central bank assets following the invasion of Ukraine, per Goldman Sachs, as said in late August.

Goldman Sachs Research also expects central banks to buy an average of 50 tons of gold per month in 2026, up from an average of 17 tons per month before 2022.

This demand can be an important source of support for prices, particularly when other investors are worried about currencies, sovereign debt or geopolitical risks. Goldman Sachs Research earlier predicted the precious metal will rise to $4,900 per troy ounce by the end of 2026.

Reserve Diversification: A Long-Term Tailwind

For decades, U.S. dollar assets and Treasuries have been central to global reserve management. But concerns about geopolitical fragmentation, sovereign debt, inflation and currency risks are encouraging some central banks to reassess how their reserves are positioned.

Gold offers something that Treasuries cannot: it is not backed by another government's promise to repay. Gold officially overtook U.S. Treasuries as a share of global reserves. Gold's share of total official reserve assets rose to 27% at the end of 2025, while U.S. Treasuries fell to 22% from 25%, as mentioned in the Financial Post.

AI Boom to Burst?

Former BitMEX CEO Arthur Hayes believes that the artificial intelligence (AI) boom will eventually produce a familiar outcome like some past bubble bursts. Too much investment and low returns will cause a crash and, ultimately, will lead to a bailout, as quoted on CNBC.

The belief goes against the massive investment pouring into AI infrastructure, as technology companies race for the computing power needed to develop and run increasingly advanced AI models.

Note that the AI trade is currently being viewed as an anti-Democrat trade. Moreover, Gina Hinojosa's historic victory over incumbent Greg Abbott made her the first Democratic governor of Texas in over 30 years, bringing her proposed moratorium on data center construction to the forefront.

If the AI data center boom crashes, any selloff from the AI boom bubble burst will set the stage for an upside in gold.

Bottom Line

Higher rates do not automatically mean lower gold prices. If inflation, geopolitical tensions, fiscal concerns and central-bank demand remain strong, gold could continue to shine even as bond yields remain slightly elevated.

Against this backdrop, investors can keep a close track of ETFs like GLD, iShares Gold Trust (IAU - Free Report) , SPDR Gold MiniShares Trust (GLDM - Free Report) , iShares Gold Trust Micro (IAUM - Free Report) , VanEck Gold Miners ETF (GDX - Free Report) and VanEck Merk Gold Trust (OUNZ - Free Report) .

Among these, IAUM charges the least at 9 bps in fees, followed by GLDM at 10 bps. Meanwhile, GLD and IAU enjoy the strong asset base of $132 billion and $58.6 billion, respectively.

However, if gold prices fall, investors can play inverse ETFs like ProShares UltraShort Gold (GLL) and MicroSectors Gold -3X Inverse Leveraged ETNs (DULL).

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