Gold has been considered a form of currency and a store of value for thousands of years. It’s rare, it’s malleable — meaning it’s easy to turn into portable coins and bars — and it’s practically impossible to counterfeit. Even today, in the era of fiat currency, digital payment systems and multi-trillion-dollar economies, gold continues to serve an important purpose. It’s a reliable, international economic asset and a universal monetary reserve all over the world.
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The Case for Gold
Some investors are perpetual gold bulls. Wall Street calls them goldbugs, and they will tell you there’s never a bad time to buy gold. While it’s true that the price of gold tends to rise over long time horizons regardless of what markets and economies do, right now may be a particularly good time to invest in the shiny yellow metal. Here are some properties that make gold attractive today:
— A hedge against inflation: Rising geopolitical tensions around the world and a global trade war have reignited inflation fears. Gold tends to retain its value and can protect purchasing power when prices are rising.
— A safe haven: World economies are dealing with heightened economic uncertainty and market volatility. In times like these, investors flock to gold, which can drive its price even higher.
— Diversification: The price of gold is not closely correlated with stocks, bonds or other financial securities. Adding gold to a portfolio can reduce overall volatility.
— Extremely limited supply: Gold is a finite resource that is difficult to find, mine for and process. In other words, gold is scarce, which supports its long-term value.
— Highly liquid: The gold market is among the most liquid in the world. Gold is easily bought and sold all over the globe in various forms, including coins, bars, bullion and securities contracts.
— Devaluation protection: Gold is a physical commodity, not a fiat currency. Governments can and do devalue currencies, and inflation and government debt have that same effect. Gold can be a shield against weakening paper money.
The Case for Gold ETFs
Gold is an internationally recognized commodity that trades practically continuously on major markets in New York, London and Asia. Some markets that offer gold futures and other gold-backed derivatives operate 24 hours a day when markets are open.
Still, physical gold transactions by retail and most other non-institutional investors face severe limitations. Gold dealers and financial institutions that facilitate the buying and selling of gold have fixed hours and won’t buy gold until it’s been tested, weighed and appraised, which can require 24 hours’ notice, or more. They also charge notoriously high fees, commissions and delivery charges. And if you buy physical gold in coin or bullion form, it will need to be securely stored and insured. The bottom line is that buying physical gold can be expensive, risky and impractical.
For most people looking to gain exposure to gold, a more practical solution is to invest in gold exchange-traded funds (ETFs). An ETF is a convenient type of mutual fund that trades on major exchanges just like shares of common stock. Gold ETFs can hold physical gold, gold derivatives, and shares of gold mining and processing companies. They are a convenient and cost-effective way for any investor to indirectly own gold and gold-related securities without the special risks and costs of owning bars, coins or bullion.
5 Gold ETFs to Buy Today
There are several types of gold ETFs. The most straightforward gold funds simply own physical gold in the form or gold bars or bullion. Others invest in gold derivatives like futures and swap agreements, and another category owns mining, exploration and processing companies. The five funds on this list represent ETFs from each group. They are all administered by credible asset managers, and each one is worth your consideration.
| Gold ETFs | Expense Ratio | Net Assets |
| SPDR Gold MiniShares (ticker: GLDM) | 0.10% | $14.9 billion |
| iShares Gold Trust Micro (IAUM) | 0.09% | $2.7 billion |
| VanEck Junior Gold Miners ETF (GDXJ) | 0.51% | $5.3 billion |
| ProShares Ultra Gold (UGL) | 0.95% | $477 million |
| VanEck Merk Gold ETF (OUNZ) | 0.25% | $1.7 billion |
SPDR Gold MiniShares (GLDM)
GLDM is a gold ETF with over $14.9 billion in net assets. The only holding in the portfolio is 99.99% pure gold bullion.
GLDM is the sister fund of SPDR Gold Shares (GLD), which, with assets of $98 billion and trading volumes that routinely top 12 million shares a day, is the largest and most popular physical gold ETF in the world.
The key material difference between the two funds is that GLDM is structured to have a lower share price than GLD, making it more attractive and more accessible to small investors.
After the expenses are subtracted, GLDM should precisely reflect the market price of gold.
iShares Gold Trust Micro (IAUM)
IAUM is the physical gold fund for the cost-conscious ETF investor. Physical gold investing can be expensive, and gold ETFs can have expense ratios as high as 0.55% or more. IAUM has a very low expense ratio of just 0.09%, making it the lowest-cost ETF on the market.
This fund’s low cost structure does not mean, however, that investors have to sacrifice quality, liquidity or service. IAUM is a member of the iShares family of ETFs that’s owned and managed by BlackRock Inc. (BLK). Investors can rest assured that this fund will provide them with all the benefits of indirect ownership of gold and quality of iShares.
Investors worried about the resurgence of inflation or who just want to diversify into gold will find everything they’re looking for in IAUM. The fund has net assets of $2.7 billion.
[Read: 15 Best Dividend Stocks to Buy Now]
VanEck Junior Gold Miners ETF (GDXJ)
GDXJ was designed to track the performance of the MVIS Global Junior Gold Miners Index. This index fund has assets of $5.3 billion and is a reliable proxy for the small-cap gold and silver miners stock universe.
Gold mining companies provide investors with indirect exposure to gold, along with the benefits of small-cap equity investing. The portfolio includes some companies in the exploration and mine development aspect of the business.
The fund has a higher average daily trading volume than any of the 88 stocks in the portfolio. This means that an investor can achieve a higher level of liquidity by buying the fund than by buying any of the stocks directly.
GDXJ has an expense ratio of 0.51% and a current forward dividend yield of 1.7%.
ProShares Ultra Gold (UGL)
UGL is a gold ETF that doesn’t own any gold. Instead, UGL invests in a sophisticated type of gold derivative called swap agreements. The objective of this $477 million fund is to deliver roughly twice the performance of the price of gold as reported daily by the Bloomberg Gold Subindex.
UGL is an aggressive, leveraged ETF. That means the swap agreements the fund holds are essentially bought on margin. The leverage is what boosts the fund’s performance to two times the performance of the gold market, but investors need to be aware that leverage can work against them as well.
UGL is suitable for aggressive investors looking to profit from the recent uptrend in gold, but keep in mind that ProShares can only claim to achieve the fund’s objective over a single trading day. In a very real sense, the longer this fund is held, the riskier it becomes.
VanEck Merk Gold ETF (OUNZ)
OUNZ is included on today’s list because it is one of the most versatile and unique gold ETFs on the market. It’s a $1.7 billion fund that provides exposure to physical gold and also has an innovative feature that makes OUNZ a one-of-a-kind ETF.
OUNZ offers every shareholder the ongoing option of exchanging some or all of their shares for gold bars or gold coins. Investors in OUNZ have the best of both worlds: the convenience of ETF investing and an opportunity to own physical gold.
Shares can be held in any brokerage account and, if and when an investor decides to turn their shares into coins or bars, the exchange is easy to do. The paperwork is simple and there are no delivery charges for clients in the continental U.S.
The fund’s expense ratio is just 0.25%. That’s very reasonable for a fund with such unique attributes.
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5 Gold ETFs to Buy Today originally appeared on usnews.com
Update 06/23/25: This story was previously published at an earlier date and has been updated with new information.