For gold investors, all eyes are on the Federal Reserve meeting this week and the July 29 announcement of an interest rate decision.
For now, the central bank is expected to leave rates unchanged and perhaps raise them later in the year, leaving gold in a holding pattern around $4,000 an ounce.
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Gold’s Response to Inflation, Higher Interest Rates
“Investors aren’t feeling comfortable that inflation is under control given the volatility in oil,” says David Miller, chief investment officer at Catalyst Capital Advisors and portfolio manager of the Strategy Shares Gold Enhanced Yield ETF (ticker: GOLY). “There is real concern that the Fed may need to hike interest rates, and higher rates are not good for gold in the short term.”
That’s because gold itself doesn’t pay any interest. So, when interest rates rise and investors can get more yield on relatively safe government bonds, the opportunity cost of holding the precious metal, also considered a safe-haven investment, rises.
“Until we get market clarity, I think we’re in a sideways gold market for the time being,” says Collin Plume, founder and CEO of Noble Gold Investments.
That could change if turmoil in the Middle East eases and inflation cools, lessening the rate-hike risk for gold.
Central Banks’ Influence on Gold Prices
Beyond current geopolitics, a longer-term trend affecting gold prices has been central bank buying.
“Central banks have become the most important force in the gold market, and their motivation is very different from an investor chasing a hedge; they want reserves that no foreign government can touch,” says Patrice Mesnier, founding partner of Oldenburg Capital Partners.
“In 2022, the West froze Russia’s reserves, and every central bank in the world watched it happen,” Mesnier says. “In the wake of that policy, many have been quietly shifting a portion of their savings out of dollars and into gold ever since.”
Last year, central banks bought 863 metric tons of gold, even as prices hit record highs, according to the World Gold Council, a gold industry trade group. In each of the previous three years, these institutions bought more than 1,000 metric tons. That compares to an average of 470 metric tons per year from 2010 to 2021.
“Down about 20% in the last six months, but unchanged in the last one month, gold prices have likely been recently supported by ongoing buying by central banks around the world,” says Thomas Winmill, portfolio manager of the Midas Discovery (MIDSX) fund, which counts gold miners in its top 10 holdings. “These banks are long-term holders taking advantage of bargain gold prices not seen since early fall 2025.”
Advantages of Gold ETFs by Type
Investors who want to gain exposure to gold through the ease of a brokerage account instead of physical gold can consider gold exchange-traded funds, or ETFs, which come in different forms to fit different investing needs.
Gold Mining ETFs
Some hold mining companies. These can outperform the price of gold as the metal rises in value because the increase in the gold price adds to cash flow while operating and financial leverage amplify gains. This is assuming production costs and company debt remain the same. While an erosion of gold’s value could create the opposite scenario, companies in a declining-gold-price environment can take measures to offset the damage by cutting costs, finding efficiencies or boosting production.
Another advantage of mining companies is that they can use cash flow to fund dividends or share buybacks, differentiating them from non-yield-bearing gold holdings.
“Precious metals miners are generating substantial amounts of free cash flow given profit margins of over $2,000 per ounce, and are returning this cash to shareholders through buybacks and dividends,” says Chris Mancini, co-portfolio manager of the Gabelli Gold Fund (GLDAX). “Buying the miners is a cheap way to get exposure to the price of gold.”
Physical Gold and Futures ETFs
Some funds invest in physical gold stored in vaults, while others are backed by futures contracts. In these cases, the funds still trade on stock exchanges like regular shares of any company, meaning they’re much easier for investors to deal with than actually trading futures or buying and storing physical gold themselves.
Here’s a look at five top gold funds:
| ETF | Expense ratio | Net assets | Fund focus |
| SPDR Gold Shares (GLD) | 0.40% | $132.2 billion | Physical gold bullion held in secure vaults |
| VanEck Gold Miners ETF (GDX) | 0.51% | $23.1 billion | Large, geographically diversified global gold-mining corporations |
| VanEck Junior Gold Miners ETF (GDXJ) | 0.52% | $7.1 billion | Small-cap “junior” companies focused on gold exploration and mine development |
| Invesco DB Precious Metals Fund (DBP) | 0.70%* | $205.6 million | Futures contracts for gold, silver and platinum |
| WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN) | 0.45% | $143.2 million | Combines mining stocks and futures, aiming for a more efficient use of capital |
*Includes 0.06% fee waiver in effect through at least Aug. 31.
SPDR Gold Shares (GLD)
This fund managed by State Street Investment Management is the biggest among those backed by physical gold, with more than $130 billion in assets. GLD was the first gold-backed ETF to trade on U.S. markets, and it remains one of the most popular gold ETFs with both retail and institutional investors.
The fund’s gold is held on behalf of shareholders with trusted custodians like JPMorgan Chase & Co. (JPM) in the U.S. and HSBC Holdings PLC (HSBC) in London. The fund has an expense ratio of 0.4%, or $40 annually on $10,000 invested.
VanEck Gold Miners ETF (GDX)
Gold mining companies and the funds that hold them carry operational risks, but they also can have advantages over gold itself.
GDX holds the world’s biggest gold miners, including Newmont Corp. (NEM) and Barrick Mining Corp. (B). Their size and geographic diversification give larger mining companies a measure of stability that can be welcome in a difficult industry.
This mining equity ETF tracks the MarketVector Global Gold Miners Index and has an expense ratio of 0.51%.
VanEck Junior Gold Miners ETF (GDXJ)
In addition to large mining companies with producing operations, the gold mining sector has so-called junior miners that are primarily involved in exploring for gold, developing mines or producing much smaller amounts than their larger brethren.
These miners tend to be more risky, and so an ETF can be more practical than investing in individual stocks of smaller firms. But that diversification can be a double-edged sword because it means the ETF as a whole may not perform as well as a single gold miner that strikes it rich.
This ETF tracks the MVIS Global Junior Gold Miners Index, and it has an expense ratio of 0.52%.
Invesco DB Precious Metals Fund (DBP)
Investors who want exposure to gold futures contracts without the hassle of setting up a futures trading account can turn to this offering. While this fund also invests in silver and platinum futures, most of its holdings are in gold futures traded on the Comex division of the New York Mercantile Exchange.
Futures tend to track the price of gold more closely than mining stocks. And, unlike physical gold, which is priced on the spot market, futures offer investors a chance to express an opinion about where prices will go in coming months.
This fund has a 0.7% net expense ratio currently.
WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN)
This ETF combines both futures and major mining stocks.
The fund’s literature notes that investors seeking exposure to gold will often buy exposure to physical metal and mining companies in two separate trades. GDMN’s hybrid approach aims to offer a more efficient use of capital. Futures offer leverage, which can amplify returns — or magnify losses.
For every $100 invested in the fund, $90 goes to mining stocks and $10 to short-term collateral. Because of the nature of futures markets, where leverage allows investors to control relatively large positions with a small amount of collateral, the fund also invests $90 in gold futures.
The fund has an expense ratio of 0.45%.
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5 Best Gold ETFs to Buy for 2026 originally appeared on usnews.com
Update 07/28/26: This story was published at an earlier date and has been updated with new information.
