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

The U.S. government entered its first shutdown in seven years on Oct. 1, instilling significant fear among investors, and prompting a rapid flight from stocks to precious metals. This shift is evident from the sell-off witnessed in major U.S. stock futures, including the Dow Jones Industrial Average futures, as well as those on the S&P 500, both of which fell a little less than 1%. Amid this market unrest, as investors flocked to safe-haven assets, gold prices surged to $3,875 per ounce, hitting new record levels.

This surge in gold prices naturally shines a spotlight on gold-backed exchange-traded funds (“ETFs”), which provide investors an accessible way to capitalize on the precious metal’s safe-haven status without owning physical bullion.

What Is Driving Gold’s Bull Run?

Traditionally, gold is seen as a reliable store of value and a hedge against economic and geopolitical instability. Unlike stocks or bonds, it does not carry counterparty risk. No doubt, gold's rally in yesterday’s trading session was fundamentally driven by the looming threats of a prolonged government shutdown, which could stall critical economic data releases such as the non-farm payroll report.

However, a few other factors, such as the uncertainty about U.S. fiscal policy and economic growth, have heightened fears of volatility and recession risks in the stock market, attracting more buyers to invest in gold. Compounding this sentiment are signs of a weakening labor market and a strong possibility of more Federal Reserve interest rate cuts in the near term, which further boosted gold’s appeal by lowering real yields on other investments.

Also, a weaker dollar makes gold, which is priced in U.S. dollars, more affordable for overseas buyers, thereby increasing its demand. To this end, it is worth noting that the value of the U.S. dollar against other currencies fell about 11% in the first half of 2025, the biggest decline in more than 50 years, as stated in a Morgan Stanley report. Keeping up with this trend, the U.S. dollar index declined for the fourth straight session on Oct. 1 (as per Trading Economics data).

Thus, such a weakening U.S. currency, along with the other unfavorable factors mentioned above, going against a favorable equity investment environment, prompted investor preference for gold to reach unprecedented levels, not seen in over a decade. This has set the stage for Gold ETFs to continue with their rally in the coming days.

Gold ETFs in Focus

In the following discussion, we explore key gold ETFs, their assets, expense ratios, and how they performed amid volatility to help investors better navigate the current market environment impacted by the U.S. government shutdown and shifting macroeconomic trends.

SPDR Gold Shares (GLD)

It is the first U.S.-traded gold ETF with approximately $124.53 billion in Assets Under Management (“AUM”). Its net asset value (“NAV”) as of Sept. 30, 2025, was $352.09.

GLD has surged a solid 46.8% year to date. The fund charges 40 basis points (bps) as fees.

iShares Gold Trust (IAU)

This fund has $59.15 billion in AUM, while its NAV as of Sept. 30, 2025, was $72.08. IAU has surged a solid 47% year to date. The fund charges 25 bps as fees.

iShares Gold Trust Micro (IAUM)

This fund has $4.72 billion in AUM, while its NAV as of Sept. 30, 2025, was $38.14. IAUM has surged a solid 47.1% year to date. The fund charges 9 bps as fees.

abrdn Physical Gold Shares ETF (SGOL)

This fund has $6.24 billion in AUM, while its NAV as of Sept. 30, 2025, was $36.47. SGOL has soared 46.9% year to date. The fund charges 17 bps as fees.

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

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