Core Insights - The price of gold has increased by 62% year to date through December 15, 2025, potentially marking the fourth-best calendar year performance in over 110 years and the best since 1979 when gold prices rose by 133% [1] Gold Market Overview - Gold is traditionally viewed as a defensive or inflation hedge, but in 2025, it has not performed in this capacity as the S&P 500 has risen over 14% and investors are primarily risk-seeking [2] - Current inflation is at 3% annualized, which is above the Federal Reserve's target but not excessively high [2] Investment Characteristics - Gold serves more as a volatility hedge than a direct inflation or defensive asset, with a near-zero correlation to U.S. stocks over the long term, making it a valuable risk diversifier in investment portfolios [3] - When investing in gold ETFs, it is crucial to focus on controlling costs, particularly by selecting funds with lower expense ratios and trading spreads to maximize long-term returns [3] Recommended Gold ETFs - The SPDR Gold Trust (GLD) is the largest and most recognized gold ETF but has a higher expense ratio of 0.40% [5] - The SPDR Gold MiniShares Trust (GLDM) offers a lower expense ratio of 0.10% and has over $25 billion in assets under management, making it a highly tradable option [6] - The iShares Gold Trust (IAU) is the second-largest gold ETF with a 0.25% expense ratio, which is still higher than many competitors [9]