The iShares Gold Trust ETF (IAU) has significantly outperformed the SPDR S&P 500 ETF Trust (SPY) this year, with gold prices exceeding $4,000/oz while SPY posted nearly 15% gains. This strong performance is driven by a 'perfect storm' of factors including anticipated Federal Reserve interest rate cuts, a softening U.S. dollar, persistent central bank diversification into gold, and elevated geopolitical instability fueling safe-haven demand. Analysts project further substantial upside for gold, with targets up to $5,000 next year, indicating a potential structural repricing rather than a cyclical peak for the asset.
Investing SPY Got Beat 3-To-1 By This ETF This Year Oct 7, 2025 | Updated 12:11 PM ET This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them. Key Points - The S&P 500 has performed well this year. - However, some ETFs have still trounced its gains. - This one ETF is “boring” in nature but is outperforming even most tech stocks. - Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; learn more here.(Sponsor) iShares Gold Trust ETF (NYSEARCA:IAU) had significantly outperformed SPDR S&P 500 ETF Trust (NYSEARCA:SPY) this year. While SPY has posted impressive gains of nearly 15% year-to-date—making this a stronger-than-average year for the S&P 500 with almost three months remaining—gold spot prices have made iShares Gold Trust a better investment so far in 2025. A new gold rush is brewing Spot gold prices have been explosive this year and have trounced even big-name tech stocks like Nvidia (NASDAQ:NVDA) year-to-date. For the long-term, cost-conscious investor, iShares Gold Trust ETF is a great bet. It has $61.5 billion in total assets and low fees at just 0.25%, or $25 per $10,000. Each share of IAU constitutes a fractional undivided interest in physical gold held in secure vaults by JPMorgan Chase Bank as the custodian. The gold is allocated, meaning it is specifically identified and held in the name of the trust. It’s ideal for investors who want direct gold price exposure without the hassle of buying, storing, or insuring bullion. IAU may not even be at its peak potential, as trends say that gold is set to continue going up. As of this writing, gold broke through $4,000/oz. Two years ago, this was a fantasy. Why a gold surge can continue for years There is a “perfect storm” underway for the yellow metal. First, the Federal Reserve is restarting interest rate cuts, with one already going through last month. Two more rate cuts are expected by the end of this year. Each tick lower in real yields automatically makes non-coupon gold more attractive as it lowers the opportunity cost for holding growth. Second, the U.S. dollar has softened significantly this year. This translates over into a higher price and then demand for gold. Central banks worldwide are expected to buy over 1,000 tonnes of gold in 2025 in a bid to diversify away from dollar-heavy reserves. Central banks have bought over 1,000 tonnes of gold for three consecutive years. On top of that, geopolitical fog, tariffs, and a U.S. government shutdown and hot conflicts in two regions have revived gold’s oldest use-case: the asset you own when nothing else feels safe. Reserve diversification is a multi-year theme, mine supply is flat despite the price incentive, and recycling flows have actually fallen as consumers hold old jewellery in anticipation of even higher quotes. Add the fact that global debt-to-GDP is still rising and real yields are still modest, and the floor under bullion looks more solid than usual. Can IAU keep trouncing the SPY? Analysts are constantly upping their price targets to follow the uptrend. UBS says $4,200 by year-end, with some having their price targets at $4,500 or more. Goldman Sachs says $5,000 next year. This implies a 25% gain from here, something that the S&P 500 is unlikely to match. For holders of IAU, the implication is that the ETF may still be in the early innings of a structural repricing rather than the late stages of a cyclical burst. Gold can and likely will correct sometime in the future, but holding cash and waiting for it to happen is not a smart idea today. Get Ready To Retire (Sponsored) Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. Here’s how it works: 1. Answer SmartAsset advisor match quiz 2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles. 3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future. The image featured for this article is © 24/7 Wall St. Latest Podcast Episode AI Companies Entering A Game of Chips More Wild Than Westeros 62 min The iShares Gold Trust ETF (IAU) has significantly outperformed the SPDR S&P 500 ETF Trust (SPY) this year, with gold prices soaring past $4,000/oz compared to SPY's impressive but lesser 15% year-to-date gain. This strong performance, reflected in IAU's highly positive sentiment (0.9), highlights gold's current market strength even against broad market indices and prominent tech stocks like Nvidia (NVDA). IAU, managing $61.5 billion in assets with a low 0.25% expense ratio, offers investors cost-efficient physical gold exposure. Gold's rally is fueled by a 'perfect storm' of macro factors, including anticipated Federal Reserve interest rate cuts, with one already implemented and two more projected by year-end, which decrease the opportunity cost of holding the non-yielding asset. A softening U.S. dollar further enhances gold's appeal by making it cheaper for international buyers, contributing to increased demand. Moreover, global central banks are persistently diversifying reserves away from the dollar, having bought over 1,000 tonnes of gold annually for the past three years and expecting to do so again in 2025. Geopolitical tensions, tariffs, and rising global debt-to-GDP ratios are also reviving gold's traditional role as a safe-haven asset, reinforcing its demand amidst market uncertainties. Flat mine supply and declining recycling flows further constrain supply, providing a solid floor for bullion. Analyst expectations indicate sustained upside for gold, with UBS targeting $4,200 by year-end and Goldman Sachs forecasting $5,000 next year, implying a potential 25% gain from current levels. This suggests that the current trend represents a structural repricing rather than a temporary cyclical peak, positioning gold for continued strength.
AI-powered research, real-time alerts, and portfolio analytics for institutional investors.
Request a DemoOverall Sentiment
strongly positive
Sentiment Score
0.85
Ticker Sentiment
