Core Insights - Gold exchange-traded funds (ETFs) are becoming increasingly popular among investors, with the price of gold rising nearly 60% over the past year to $4,204 per troy ounce, compared to a 12.9% increase in the S&P 500 index [3][4] - Experts suggest that while gold can serve as a store of value during market turbulence, it is typically volatile and may not outperform other asset classes like stocks and bonds over the long term [5][6] Investment Considerations - Investors are advised to limit their gold investments to no more than 5% of their portfolios, as gold tends to underperform compared to other asset classes over time [5][6] - The largest gold ETF, SPDR Gold Shares (GLD), has $140 billion in assets, indicating significant investor interest in gold ETFs [7] Tax Implications - Gains from gold ETFs may be taxed at higher rates than other investments; long-term capital gains from gold are taxed at a maximum rate of 28% due to its classification as a collectible by the IRS [9][10] - Gold futures ETFs, such as Invesco DB Gold Fund (DGL), have unique tax treatments governed by the IRS's 60/40 rule, where 60% of gains are taxed at long-term rates and 40% at ordinary rates [11][12] Types of Gold ETFs - There are various types of gold ETFs, including those that invest directly in physical gold, gold futures contracts, and gold-mining companies [6][12] - Gold-mining ETFs provide indirect exposure to gold prices and are subject to normal short- and long-term capital gains tax rates [12][13]