Spotlight on Gold ETFs as Bullion Hits Record Amid U.S. Govt Shutdown

Core Insights - The U.S. government entered its first shutdown in seven years on October 1, leading to significant investor fear and a shift from stocks to precious metals, particularly gold, which surged to $3,875 per ounce, a new record level [1][3] Market Dynamics - The government shutdown has raised concerns about prolonged economic instability, affecting critical economic data releases, which has historically driven investors towards gold as a safe-haven asset [3][4] - Additional factors contributing to gold's appeal include uncertainty regarding U.S. fiscal policy, signs of a weakening labor market, and expectations of Federal Reserve interest rate cuts, which lower real yields on other investments [4][5] Currency Impact - A weaker U.S. dollar, which fell approximately 11% in the first half of 2025, has made gold more affordable for international buyers, further increasing demand [5][6] - The U.S. dollar index has declined for four consecutive sessions as of October 1, indicating a trend that favors gold investments [5][6] Gold ETFs Overview - Gold-backed exchange-traded funds (ETFs) are highlighted as accessible investment vehicles for capitalizing on gold's safe-haven status [2][6] - Key gold ETFs include: - SPDR Gold Shares (GLD): Approximately $124.53 billion in Assets Under Management (AUM), with a year-to-date surge of 46.8% and fees of 40 basis points [8] - iShares Gold Trust (IAU): $59.15 billion in AUM, year-to-date increase of 47%, with fees of 25 basis points [9] - iShares Gold Trust Micro (IAUM): $4.72 billion in AUM, year-to-date growth of 47.1%, with fees of 9 basis points [10] - abrdn Physical Gold Shares ETF (SGOL): $6.24 billion in AUM, year-to-date rise of 46.9%, with fees of 17 basis points [12]