The price of gold has been on a spectacular run lately, hitting back-to-back record highs over the past two weeks and surging past the $4,300 per ounce mark on Oct. 17. Earlier in the session, gold was on track for its biggest weekly gain since September 2008, when the global market faced a financial crisis due to the collapse of Lehman Brothers (as reported by Reuters).
However, by the end of Friday, gold saw a sharp 2% pullback, marking its biggest weekly loss in over two months. While some traders view this as a cooling-off after an overbought rally, long-term exchange-traded fund (ETF) investors may see this as a strategic opportunity to gain gold exposure at a relative discount.
What Caused the Rally and the Subsequent Dip?
The historic rally that gold prices witnessed recently was fueled by a combination of factors that included rising fiscal uncertainty amid the ongoing U.S. government shutdown and a weakening dollar, escalating geopolitical tensions worldwide, as well as upheaval in U.S.-China trade relations, intensifying fears of a broader market correction that can hit the stock market anytime soon. Additionally, persistent purchase of the yellow metal by central banks created a solid demand foundation, with institutions expected to buy around 900 tons of gold in 2025, as projected by J.P. Morgan Research in June.
These factors forced investors to seek shelter in safe-haven assets like gold, thus propelling its price to witness the enormous growth in early October.
The sharp correction that gold prices observed on Friday can be primarily attributed to a wave of profit-booking by investors following the parabolic rise, coupled with signs of easing US-China trade tensions after a more conciliatory tone from U.S. President Donald Trump.
Will Gold Rise Again?
Analysts remain broadly optimistic about gold’s future. Evidently, HSBC raised its 2025 average gold price forecast on Oct. 17, by $100 to $3,455 per ounce, citing geopolitical tensions, economic uncertainty, and a weakening U.S. dollar as the driving forces. Looking ahead, it projects prices could reach $5,000 in 2026.
Meanwhile, as reported by Reuters, Goldman Sachs raised its December 2026 projection for gold price from $4,300 to $4,900 per ounce in the first week of October, citing persistent global uncertainty and central bank purchases as the primary catalyst.
Why Focus on Gold ETFs and Not Physical Gold?
Owning physical gold can be costly, illiquid and inconvenient. Gold ETFs, however, offer a low-cost, transparent, and easily tradable way to invest in the metal’s performance without storage or insurance hassles. Unlike coins or bars, ETFs can be bought and sold instantly, allowing investors to react swiftly to market moves. This liquidity, combined with minimal management costs, makes ETFs the preferred modern instrument for gold exposure. Moreover, major funds track spot prices closely, providing nearly identical returns to holding bullion itself.
Impressively, as per the World Gold Council’s (WGC) Oct. 13 report, gold ETFs have added 638 tonnes year to date, bringing total holdings to 3,857 tonnes.
Gold ETFs to Watch
Amid the current market situation, the recent dip could present an attractive entry point for investors who missed the recent peak and are now exploring gold-themed ETFs, like the ones mentioned below.
SPDR Gold Shares (GLD)
It is the first U.S.-traded gold ETF with approximately $142.22 billion in Assets Under Management (“AUM”). Its net asset value (“NAV”), as of Oct 17, 2025, was $388.79.
GLD has surged a solid 60.7% year to date. The fund charges 40 basis points (bps) as fees.
iShares Gold Trust (IAU)
This fund has $66.17 billion in AUM, while its NAV, as of Oct 17, 2025, was $79.60. IAU has surged a solid 62.9% year to date. The fund charges 25 bps as fees.
iShares Gold Trust Micro (IAUM)
This fund has $5.61 billion in AUM, while its NAV, as of Oct 17, 2025, was $42.12. IAUM has surged a solid 63.2% year to date. The fund charges 9 bps as fees.
abrdn Physical Gold Shares ETF (SGOL)
This fund has $7.09 billion in AUM, while its NAV, as of Oct 17, 2025, was $40.28. SGOL has soared 60.9% year to date. The fund charges 17 bps as fees.
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SPDR Gold Shares (GLD): ETF Research Reports iShares Gold Trust (IAU): ETF Research Reports abrdn Physical Gold Shares ETF (SGOL): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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