ETFs to Consider as Gold Breaks the $4,000 Barrier

Core Insights - Gold prices have surged by 27.01% over the past six months and 53.85% year to date, reaching over $4,000, making it one of the best-performing assets of the year [1] - Strong investor inflows into gold ETFs, a weaker dollar, and sustained central bank buying are driving this increase [1][2] - Market expectations of further Fed rate cuts and ongoing geopolitical tensions could extend gold's gains into 2026, suggesting a favorable environment for increased portfolio allocation to gold [2] ETF Demand and Projections - Investor demand for gold-backed ETFs surged in September, marking the largest inflows in over three years [6] - Goldman Sachs and UBS have raised their gold price forecasts, with Goldman Sachs projecting a price of $4,900 per ounce by December 2026, up from $4,300 [5][6] - The CME FedWatch tool indicates a 94.6% likelihood of an interest rate cut in October and a 99.3% likelihood in December, which is expected to further support gold prices [4] Investment Strategies - Investors are advised to consider allocating up to 15% of their portfolios to gold, contrary to traditional advice of limiting alternative asset classes to single-digit percentages [3] - A long-term passive investment strategy is recommended to navigate short-term market fluctuations, with a "buy-the-dip" approach suggested for potential declines in gold prices [9] ETF Options - For physical gold exposure, investors can consider SPDR Gold Shares (GLD), iShares Gold Trust (IAU), SPDR Gold MiniShares Trust (GLDM), abrdn Physical Gold Shares ETF (SGOL), and iShares Gold Trust Micro (IAUM) [8] - GLD is noted for its liquidity with an average trading volume of 14.48 million shares and an asset base of $128.64 billion, making it the largest among gold ETFs [10] - For gold miners, options include VanEck Gold Miners ETF (GDX), Sprott Gold Miners ETF (SGDM), VanEck Junior Gold Miners ETF (GDXJ), and Sprott Junior Gold Miners ETF (SGDJ), with GDX being the most liquid and having an asset base of $22.96 billion [11][12]