Gold is back, and investors are making their bets through ETFs rather than burying bars in the backyard. After a brief stumble on Friday during a broader sell-off in high-flying tech stocks, the yellow metal resumed its upward march on Monday, climbing as much as 1.2% and nearing the peak levels it hit last October.
The rally reflects a familiar pattern: when tech valuations start looking shaky and macroeconomic uncertainty creeps in, investors remember that gold exists for a reason. The metal's short-term correlation with stocks has increased in recent months, but it continues to play its traditional role as portfolio insurance during periods of market stress.
Follow the ETF Flows
What's particularly interesting is how investors are expressing their bullish gold views. Rather than diving into futures contracts or dealing with physical bullion, they're piling into physically-backed gold ETFs. World Gold Council statistics show month-over-month increases in gold ETF investments, with May being the lone exception during a period when equity markets were broadly optimistic.
SPDR Gold Shares Trust (GLD) remains the go-to vehicle for institutional investors and active managers who want tactical gold exposure. As one of the most liquid commodity ETFs globally, it's backed by actual gold bullion and serves as a quick-deploy hedge during equity market turbulence or major macro events like Federal Reserve policy announcements. On Friday alone, GLD pulled in over $300 million in inflows, according to data from VettaFi.
For long-term investors watching their expense ratios, iShares Gold Trust (IAU) has emerged as a compelling alternative. It offers similar physical gold exposure but at a lower cost, making it attractive for strategic portfolio allocation rather than short-term trading. IAU quietly attracted more than $262 million on Friday as investors sought protection against market volatility and potential inflation driven by policy shifts. The lower fee structure makes it particularly appealing for buy-and-hold investors who view gold as a permanent portfolio component rather than a tactical trade.
Investors wanting broader precious metals exposure while maintaining a heavy gold weighting might consider Aberdeen Physical Precious Metals Basket Shares (GLTR). While not a pure gold play, GLTR's diversified approach provides access to gold's safe-haven characteristics alongside other precious metals. The fund has gained an impressive 76% this year.
The Macro Picture
U.S. monetary policy expectations are driving much of the gold enthusiasm. Weak nonfarm payrolls data due Tuesday could strengthen the case for interest rate cuts next year, according to recent reports. Lower rates reduce the opportunity cost of holding non-yielding assets like gold, making the metal more attractive. A weaker dollar environment over recent days has provided additional tailwinds for bullion prices.
Political uncertainty is adding fuel to the fire. In a recent interview with the Wall Street Journal, President Donald Trump reiterated his preference for aggressive interest rate cuts, injecting another element of unpredictability into the monetary policy outlook.
Gold's 65% gain this year underscores why ETFs have become the preferred vehicle for accessing the metal. They eliminate the storage costs, insurance headaches, and authentication concerns that come with physical ownership while maintaining exposure to price movements.
As investors reassess their exposure to stretched tech valuations and position for a potentially lower interest rate environment, gold ETFs are reclaiming their role as essential portfolio hedges. It turns out that even in an era dominated by artificial intelligence and cutting-edge technology, sometimes the oldest form of money still does the job when markets get choppy. Gold might not be as exciting as the latest tech breakthrough, but when volatility strikes, it remains the reliable backup plan that actually shows up.