3 Different Gold ETF Strategies for the Second Half

Gold has reached record highs in 2025 amid tariff concerns and U.S. debt worries, leading to increased interest in gold ETFs. As geopolitical tensions rise and the job market potentially weakens, investors are turning to gold as a safe haven, with prices reaching $3,500 per ounce in April and currently holding steady at $3,350. Analysts, like Ole Hansen from Saxo Bank, suggest potential for further gains, possibly reaching $4,000, driven by a dovish Federal Reserve policy pivot amid economic uncertainty, leading to a wide variety of ETF options for investors.

Analysis

Gold has demonstrated significant strength throughout the first half of 2025, achieving multiple record highs, including a peak of $3,500 per ounce in April, and currently maintains a level around $3,350 per ounce. This robust performance is primarily attributed to heightened tariff and trade uncertainties, particularly U.S.-China tensions, alongside growing concerns over mounting U.S. government debt, which collectively foster a risk-off sentiment favorable to safe-haven assets. The prevailing market environment, characterized by unclear trajectories for inflation, interest rates, and U.S. tariff policy, coupled with rising geopolitical tensions and signs of a potentially weakening labor market, further underpins gold's appeal, aligning with its traditional role. Industry analysis, including a projection from Ole Hansen of Saxo Bank, suggests potential for bullion prices to advance towards $4,000 per ounce, contingent on a dovish Federal Reserve policy pivot driven by factors such as post-stimulus fiscal drag, tariff-induced supply shocks, and waning consumer confidence. Investors seeking gold exposure have a diverse ETF landscape, ranging from established physically-backed funds like SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) which continue to attract inflows, to lower-cost options such as abrdn Physical Gold Shares ETF (SGOL) and GraniteShares Gold Trust (BAR) with 0.17% expense ratios. Further democratization of gold access is provided by mini/micro ETFs like SPDR Gold MiniShares (GLDM) and iShares Gold Trust Micro (IAUM), offering fractional exposure with fees as low as 0.10% and 0.09% respectively, while specialized products like VanEck Merk Gold ETF (OUNZ) offer physical deliverability, and synthetic/hybrid ETFs such as FT Vest Gold Strategy Target Income ETF (IGLD) and NEOS Gold High Income ETF (IAUI) cater to income generation.

Key Decisions for Investors

• Investors should consider maintaining or increasing strategic allocations to gold as a hedge against ongoing macroeconomic uncertainties, including persistent trade tensions, fiscal concerns, and potential market volatility, given its recent strong performance and safe-haven characteristics.
• It is advisable to evaluate the diverse range of gold ETFs, from low-cost physically-backed options (e.g., SGOL, BAR, GLDM, IAUM) for direct price tracking, to income-oriented synthetic or hybrid products (e.g., IGLD, IAUI), aligning selections with individual risk profiles, income needs, and investment objectives.
• Exercise extreme caution with leveraged (e.g., UGL) and inverse (e.g., GLL) gold ETFs, recognizing their design for sophisticated, short-term tactical trading rather than long-term investment, and closely monitor key economic data, Federal Reserve policy signals, and geopolitical developments that could influence gold's price trajectory towards the forecasted $4,000 per ounce level.