Gold has long been used as a store of value and a portfolio hedge during periods of inflation, market stress and geopolitical uncertainty. While some investors prefer physical gold, others turn to gold ETFs for liquidity, transparency and ease of access through standard brokerage accounts.
Gold ETFs allow investors to gain exposure to gold prices without dealing with storage, insurance or delivery logistics. Still, not all gold ETFs work the same way. Some hold physical bullion, while others rely on futures contracts or gold-related companies.
Understanding that difference is critical before investing.
At a Glance: Best Gold ETFs
ETF Ticker Exposure Type Risk Profile/Use Case One-Line Reason It Stands Out SPDR Gold Shares GLD Physical gold bullion Medium Largest and most liquid gold ETF iShares Gold Trust IAU Physical gold bullion Medium Lower expense ratio for long-term holders Aberdeen Standard Physical Gold Shares ETF SGOL Physical gold bullion Medium Transparent vault reporting GraniteShares Gold Trust BAR Physical gold bullion Medium Low-cost physical gold exposure ProShares Ultra Gold UGL Leveraged gold futures High Short-term amplified gold exposure Expense ratios and structures are based on current fund disclosures.
Why Investors Use Gold ETFs
Gold has historically behaved differently from stocks and bonds, which is why it is often used as a diversification tool. According to the World Gold Council, gold has maintained purchasing power over long periods and has historically performed well during periods of high inflation and financial stress.
Gold ETFs simplify access by tracking gold prices through standardized shares that trade like stocks.
What Is a Gold ETF?
A gold ETF is an exchange-traded fund designed to track the price of gold. Most major gold ETFs hold physical gold bullion in secure vaults, while others use futures contracts or derivatives.
The U.S. Securities and Exchange Commission explains that ETFs holding physical commodities expose investors to price movements of the commodity itself, minus fees and expenses.
Best Gold ETFs To Consider
SPDR Gold Shares (GLD)
GLD is the largest gold ETF by assets and is backed by physical gold stored in secure vaults. According to the fund’s prospectus, each share represents fractional ownership of gold bullion. Its high trading volume makes it popular for both short-term traders and long-term investors.
iShares Gold Trust (IAU)
IAU also holds physical gold and is structured similarly to GLD. BlackRock disclosures show IAU has a lower expense ratio, which can make it more appealing for long-term investors focused on cost efficiency. Liquidity remains strong, though trading volume is lower than GLD.
Aberdeen Standard Physical Gold Shares ETF (SGOL)
SGOL holds physical gold stored in Swiss vaults and publishes regular bar lists for transparency. According to fund documentation, investors can track exactly where gold is stored. This level of disclosure appeals to investors focused on custody transparency.
GraniteShares Gold Trust (BAR)
BAR offers physical gold exposure with one of the lowest expense ratios among bullion-backed gold ETFs. Fund disclosures emphasize simplicity and cost efficiency. Lower trading volume compared to GLD means it may be better suited for longer-term holding rather than frequent trading.
ProShares Ultra Gold (UGL)
UGL seeks to deliver twice the daily return of gold prices using futures contracts. According to ProShares, the fund resets leverage daily, making it unsuitable for long-term holding. It is typically used for short-term tactical trades.
Gold ETFs vs. Physical Gold
| Feature | Gold ETFs | Physical Gold |
|---|---|---|
| Liquidity | High | Lower |
| Storage | None required | Storage and insurance needed |
| Trading | Easy via brokerage | Slower to buy or sell |
| Costs | Expense ratios | Premiums, storage and insurance |
| Accessibility | Fractional ownership | Larger upfront cost |
The Federal Reserve Bank of St. Louis notes that gold prices often respond to inflation expectations, real interest rates and currency movements.
Risks To Understand Before Investing
Gold ETFs carry risk. Gold does not generate income and can underperform during strong equity markets.
The World Gold Council notes that gold prices can be volatile and influenced by investor sentiment, interest rates and global economic conditions.
Leveraged gold ETFs add additional risk due to daily reset mechanics.
How Gold ETFs Fit Into a Portfolio
Many investors use gold ETFs as a hedge rather than a growth engine. Vanguard research shows that small allocations to alternatives, including commodities, may reduce portfolio volatility when combined with stocks and bonds.
Position size matters, since overexposure can drag long-term returns.
Final Take to GO
Gold ETFs offer a convenient way to gain exposure to gold prices without the complexity of owning physical bullion. Funds like GLD and IAU provide liquid, transparent access, while lower-cost options like BAR may appeal to long-term holders.
For most investors, gold ETFs work best as a diversifying sleeve, not a core growth investment.
Gold ETF FAQ
- What is a gold ETF?
- A gold ETF is an exchange-traded fund designed to track the price of gold, usually by holding physical bullion or gold futures.
- Are gold ETFs backed by real gold?
- Many major gold ETFs hold physical gold bullion stored in secure vaults, as disclosed in their prospectuses.
- Are gold ETFs safe?
- Gold ETFs carry market risk and price volatility, but they eliminate storage and insurance risks tied to physical gold.
- Do gold ETFs pay dividends?
- No, gold ETFs do not pay dividends because gold does not generate income.
- How much gold should a portfolio have?
- Many investors keep gold allocations modest to balance diversification benefits and opportunity costs.
Caitlyn Moorhead and John Csiszar contributed to the reporting for this article.
Information was compiled on Jan. 23, 2026, and is subject to change.