Gold has been considered a convenient medium of exchange and a reliable store of value throughout all of recorded human history. In the early 20th century, as developed nations moved away from the classical gold standard toward a system of fiat currencies and central banking, gold took on an additional role: It became a hedge against inflation. That’s because gold retains its inherent value while fiat currencies fluctuate based on fiscal, political and economic conditions.
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Beginning at the tail end of the COVID-19 pandemic, the U.S. and other countries started to see an uptick in the inflation rate. Fueled by ongoing labor and supply chain disruptions and armed conflict in Europe, U.S. inflation rose dramatically before peaking in June of 2022 at 9.1%. In response, the U.S. Federal Reserve embarked on an aggressive program of rate hikes. Other central banks worldwide followed suit.
Inflation has moderated significantly since then, but the U.S. economy doesn’t seem to be out of the woods yet. Despite raising rates by 525 basis points (5.25 percentage points) between March 2022 and August 2023, the inflation rate stubbornly remains above the Fed’s target of 2%. As of November 2024, the annual personal consumption expenditures (PCE) rate, otherwise known as the Fed’s preferred measure of inflation, was sitting at 2.4%.
This phenomenon — inflation that is persistent and falling too slowly — has become known as sticky inflation. Economists have no definitive explanation for the stickiness but it may be due to rising wages, strong employment and positive consumer sentiment even in the face of higher prices.
Whatever the reasons, sticky inflation has had an impact on the markets. Specifically, it has had the effect of increasing uncertainty, especially about the timing of future rate cuts. When uncertainty and volatility rise, investors see gold as a safe harbor and a hedge against rising prices.
One of the best ways for investors to gain exposure to gold is through gold-related exchange-traded funds. Some investors believe that ETFs are the most convenient and cost-effective method to own gold. The commissions and fees associated with ETFs are, by an order of magnitude, less than those associated with buying gold coins or bullion. ETFs don’t have to be transported, stored or insured; they are bought and sold like common stock, and they can be held in any brokerage account.
If sticky inflation has you worried and you’re looking to hedge against inflation and volatility, here’s a list of top-quality gold ETFs to buy and hold in 2025:
| ETF | Expense Ratio | Net Assets |
| SPDR Gold Shares (ticker: GLD) | 0.40% | $74.9 billion |
| iShares Gold Trust Micro (IAUM) | 0.09% | $1.4 billion |
| VanEck Junior Gold Miners ETF (GDXJ) | 0.52% | $5 billion |
| ProShares Ultra Gold (UGL) | 0.95% | $308 million |
| VanEck Merk Gold Trust (OUNZ) | 0.25% | $1.2 billion |
SPDR Gold Shares (GLD)
GLD has assets of close to $75 billion and only one holding: 99.99% pure gold bars. It’s the largest and most prominent gold-backed ETF on the market and has an expense ratio of 0.40%.
GLD was the first U.S.-traded gold ETF and the first ETF to invest purely in a physical commodity. It remains one of the simplest, most liquid and least expensive ways to gain the inflation protection that comes from owning gold.
GLD is popular with institutional investors as well as small retail investors. After the expense ratio is accounted for, this fund tracks the price of gold bullion very closely.
iShares Gold Trust Micro (IAUM)
There are several significant costs associated with buying and holding physical gold. Gold dealers typically charge high commissions on top of delivery fees, storage fees and, often, increased insurance costs. Those are some of the reasons investors turn to IAUM.
With an expense ratio of just 0.09%, this fund is lowest-cost physical gold ETF on the market, but it still provides near-direct exposure to the daily price of gold bullion. It’s an excellent way to diversify a portfolio and fight sticky inflation.
The fund has assets of around $1.4 billion. It’s a trusted member of the iShares family of funds managed by BlackRock Inc. (BLK) and is one of the most popular gold funds available today.
[READ: How to Invest When Interest Rates Are Cut]
VanEck Junior Gold Miners ETF (GDXJ)
GDXJ is a $5 billion index ETF that tracks the performance of the MVIS Global Junior Gold Miners Index, which is a benchmark designed to reflect the universe of small-cap gold and silver mining companies.
This unique fund offers indirect exposure to gold prices plus the potential capital appreciation benefits of small-cap equity investing. The portfolio holds small gold miners and includes some companies that are in the early, exploratory stages of mine development. Yet, the fund is highly liquid. In fact, it has a much higher average trading volume than any of its component stocks.
The top three current holdings in the fund are Alamos Gold Inc. (AGI), Pan American Silver Corp. (PAAS) and Harmony Gold Mining Co. Ltd. (HMY) Those three stocks make up over 19% of the fund’s net assets.
GDXJ has an expense ratio of 0.52% and provides a modest current dividend yield of 0.57%.
ProShares Ultra Gold (UGL)
Aggressive investors who want a leveraged hedge against today’s persistent inflation may want to consider UGL.
UGL has net assets of around $308 million. This fund does not own gold; instead, the asset managers at ProShares trade a range of gold derivatives and financial instruments called swap agreements that provide roughly two times the performance of the price of gold, according to the Bloomberg Gold Subindex.
Investors need to realize that UGL is a leveraged ETF. That means that it buys securities on margin. Margin can greatly improve the upside of any fund, but it is a risk on the down side.
All of which is to say, investors who buy this fund should keep a close eye on it. ProShares only claims to be able to achieve its objective over the course of a single trading day. The longer this fund is held, the less likely it is that it will return twice the performance of its benchmark.
VanEck Merk Gold Trust (OUNZ)
OUNZ is one of the most versatile gold ETFs investors can own. This $1.2 billion fund provides indirect exposure to gold just like all physical gold funds do, but it has a unique feature that makes it really special.
OUNZ offers investors with the option of exchanging all or part of their shares for actual gold bars or, if they prefer, coins. And the exchange is not difficult to accomplish. All that’s required is some straightforward paperwork and the payment of a reasonable exchange fee. Delivery is free to clients in the lower 48 states.
You might expect an ETF with that added feature to have an exorbitant cost structure, but the expense ratio for OUNZ is just 0.25%. This is a great choice for investors who can’t quite decide if they want to own a gold-based security or the physical asset.
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The 5 Best Gold ETFs to Buy for Sticky Inflation in 2025 originally appeared on usnews.com
Update 01/06/25: This story was previously published at an earlier date and has been updated with new information.
