ETFs to Watch as Gold Breaches the $5,200 Mark

Gold prices have already climbed 60.88% over the past six months and 93.20% over the past year. The metal has seen its prices gain 6.93% over the past five days, causing it to breach the $5,200 mark. The yellow metal’s powerful 2025 rally, fueled by robust central bank purchases and persistent economic uncertainty stemming from tariff frictions and geopolitical risks, has clearly carried into 2026.

Geopolitical tensions have been the primary reason for the market volatility so far in 2026, with renewed tariff frictions adding to the woes. This uneasy backdrop may be setting the tone for the months ahead, strengthening the case for higher portfolio exposure to gold.

As per a BBC article, President Trump recently announced that he would raise tariffs on South Korea, increasing the trade tensions and adding to market unease. The comments followed earlier tariff threats against Canada. This shifting trade backdrop has boosted safe-haven demand among risk-averse investors.

Meanwhile, expectations of further Fed rate cuts in 2026 and the greenback falling to a four-year low keep the upside case for the yellow metal intact, supported by solid fundamentals and a constructive long-term outlook.

Geopolitical Tensions Keep Driving Investors Back to Gold

Gold’s safe-haven appeal remains intact, providing a crucial hedge against rising macroeconomic and geopolitical risks. U.S. military actions in Syria and Venezuela, heightened tensions across the Middle East and Asia’s key flashpoints, along with renewed risk of an escalating U.S.-Iran conflict, are reinforcing investor demand for defensive assets, keeping gold in focus.

Rate-Cut Hopes Keep Gold Attractive

Anticipation of more Fed rate cuts in 2026 is another key tailwind for the yellow metal. The greenback's value tends to move inversely with interest rate adjustments by the Fed, making the dollar weaker and less attractive to foreign investors. Expected rate cuts and a weaker dollar should continue to support the upward trend in gold.

A declining dollar also boosts gold demand by making it more affordable for buyers using other currencies. Per TradingView, the U.S. Dollar Index (DXY) has fallen 2.24% over the past five days and 10.75% over the past year. The index has recorded an all-time decline of 19.81%.

Capital Inflows Keep the Momentum Building

According to LSEG Lipper data, as quoted on Reuters, in the week ending Jan. 21, gold and precious metals commodity funds attracted $1.96 billion in net inflows, marking the 10th week of net purchases in the past 11 weeks.

Per another Reuters article, rising inflows into gold-backed ETFs are lending support to prices amid expectations of further U.S. rate cuts. Additionally, central bank gold purchases are anticipated to remain robust this year, with Goldman Sachs expecting monthly buying to average around 60 metric tons.

Also, as per the abovementioned Reuters article, analysts also forecast the yellow metal prices to push higher, potentially toward the $6,000 level in 2026, supported by escalating global tensions alongside strong central-bank and retail demand. However, analysts note that certain factors could result in a correction in gold prices, although most of them expect any dip to be temporary and a good buying opportunity.

Analysts say several factors could trigger a correction, including a pullback in U.S. rate-cut expectations, margin calls in equities, and easing concerns about Fed independence. However, most expect any pullback to be short-lived and treated as a buying opportunity.

ETFs to Consider

Investors should not be discouraged by any near-term pullback in gold prices, as the fundamentals underpinning the rally remain strong. Instead, they should adopt a "buy-the-dip" strategy to build exposure through gold ETFs.

Below, we have highlighted a few funds in which investors can increase their allocation to gain greater exposure to gold.

Investors can consider SPDR Gold Shares GLD, iShares Gold Trust IAU, SPDR Gold MiniShares Trust GLDM, abrdn Physical Gold Shares ETF SGOL and iShares Gold Trust Micro IAUM to increase their exposure to the yellow metal.

With a one-month average trading volume of 17.31 million shares, GLD is the most liquid option. GLD has gathered an asset base of $168.76 billion, the largest among the other options. Regarding annual fees, GLDM and IAUM are the cheapest options, charging 0.10% and 0.09%, respectively, which makes them more suitable for long-term investing.

Gold Miners ETFs

These ETFs focus on gold miners, usually magnifying gold’s gains and losses. They provide access to the gold mining industry, not the commodity’s price. Investors can consider VanEck Gold Miners ETF GDX, Sprott Gold Miners ETF SGDM, VanEck Junior Gold Miners ETF GDXJ and Sprott Junior Gold Miners ETF SGDJ.

With a one-month average trading volume of 24.19 million shares, GDX is the most liquid option. GDX has also gathered an asset base of $31.33 billion, the largest among the other options. Regarding annual fees, SGDM and SGDJ are the cheapest options, charging 0.50%.

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

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