5 Etfs Riding On Gold's Longest Rally In Four Years

Gold has been on the longest winning streak since 2020, having risen for the past eight weeks. The yellow metal is trading at near all-time highs, driven by safe-haven demand amid Trump’s tariff plans. The uncertainties surrounding global economic growth and political instability also supported the rise in gold prices.

With strong demand, analysts expect gold prices to continue their upward trajectory, making it an attractive asset for long-term investors. Investors seeking to make the most of the bullion rally should invest in gold ETFs. While there are several options, we have highlighted five ETFs that have been leading the space higher. These are Franklin Responsibly Sourced Gold ETF FGDL, VanEck Merk Gold Trust OUNZ, GraniteShares Gold Trust BAR, iShares Gold Trust IAU, and iShares Gold Trust Micro IAUM. All these ETFs have risen 12% each since the start of 2025 and have a Zacks ETF Rank #3 (Hold) each.

Trade Worries Linger

As the world braces for a trade war following Trump’s tariff plans, the appeal of the yellow metal has increased. Trump’s 25% tariff on goods from Mexico and Canada, which was delayed by a month, is set to take effect in March. Early this month, Trump announced global 25% tariffs on steel and aluminum imports, which are expected to take effect on March 12. He also signed plans for reciprocal tariffs but delayed their implementation until April to allow his administration to negotiate on a one-by-one basis with countries that could be impacted. (read: Don't Turn Your Attention Away From Gold ETFs in 2025).

Further, Donald Trump threatened to impose 25% tariffs on automobile, semiconductor and pharmaceutical imports as soon as April. He is also considering imposing 25% tariffs on international lumber and wood products over the next month or sooner, with more to come. Gold is often used to preserve wealth during financial and political uncertainty and usually does well when other asset classes struggle.

Growth Concerns Resurface

The latest economic data points to a slowdown in the economy. U.S. business activity stalled in February. Consumer survey reports showed that consumer sentiment, as indicated by the University of Michigan consumer sentiment index, dropped to a 15-month low, and consumer confidence, as reflected by the consumer confidence index, plunged in February in its biggest monthly decline in four years.

Additionally, concerns are building up in the homebuilder space that tariffs would raise the cost of building materials, including lumber and appliances, thereby leading to elevated home prices and reduced affordability. Homebuilder sentiment dropped to a five-month low in February. 

Amid such a backdrop, gold is considered a great store of value and a hedge against market turmoil.

Inflationary Pressure Rises

Inflation in the United States picked up in January, fueled by higher grocery, gasoline and rent prices. Consumers' 12-month inflation expectations deteriorated to 4.3%, the highest reading since November 2023, from 3.3% in January. Over the next five years, consumers expect inflation to be 3.5%, the highest since 1995, compared with 3.2% in January, according to the latest survey (read: Inflation Picks Up in January: Dividend ETFs to Buy). 

The inflationary pressure will benefit the precious metal's status as a hedge against rising prices. However, higher inflation might compel the Fed to pause rate cuts, thus reducing the allure of non-yielding gold.

Central Bank Buying

Central banks are one of the major drivers of gold prices. The banks are dominant buyers of gold as they seek to diversify their reserves away from the U.S. dollar. Strong demand from individual investors in emerging markets, such as India and China, is also acting as a tailwind for the precious metal. 

According to the latest report from World Gold Council (WGC), global gold demand reached a record high in 2024, driven by sustained central bank buying and growth in investment demand. Central banks accumulated over 1,000 tons of gold for the third consecutive year. Global investment demand increased 25% year over year.

ETFs Leading the Space

Franklin Responsibly Sourced Gold ETF (FGDL) 

Franklin Responsibly Sourced Gold ETF seeks to reflect the performance of the price of gold bullion. It has AUM of $140.8 million and charges 15 bps in annual fees. Franklin Responsibly Sourced Gold ETF trades in an average daily volume of 41,000 shares (read: 5 Best Commodity ETFs of 2024). 

VanEck Merk Gold Trust (OUNZ)

VanEck Merk Gold Trust seeks to provide investors with a convenient and cost-efficient wayto buy and hold gold through an exchange-traded product with the option to take physical delivery of gold if and when desired. It holds gold bullion in the form of allocated London Bars. VanEck Merk Gold Trust is the only gold ETF with a patented delivery process, providing investors with the option to request delivery on any business day. The fund charges 25 bps in fees per year. VanEck Merk Gold Trust is relatively unpopular and an illiquid option compared to others in the space, with AUM of $1.4 billion and an average daily volume of 1 million shares. 

GraniteShares Gold Trust (BAR) 

GraniteShares Gold Trust is designed to seek the performance of the price of gold. It provides an investment similar to an investment in gold through a Trust without having to open a metal account. It is among the lowest-cost gold ETFs on the market, having an expense ratio of 0.17%. GraniteShares Gold Trust has amassed $952.1 million in its asset base while trading in an average daily volume of 969,000 shares. 

iShares Gold Trust (IAU)

iShares Gold Trust offers exposure to the day-to-day movement of the price of gold bullion. It is backed by physical gold under the custody of JP Morgan Chase Bank in London. iShares Gold Trust charges 25 bps in annual fees. It trades in average daily volume of 5 million shares and has an AUM of $37.6 billion.

iShares Gold Trust Micro (IAUM)

iShares Gold Trust Micro offers exposure to the day-to-day movement of the price of gold bullion. It is the lowest-cost gold ETF on the market, having an expense ratio of 0.09%. iShares Gold Trust Micro has amassed $1.7 billion in its asset base while trading in an average daily volume of 2 million shares.

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This article originally published on Zacks Investment Research (zacks.com).

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