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Gold ETFs Shining on Bullion's Biggest Monthly Gain in 2 Years

After dismal trading for most of this year, gold regained its sheen last month, buoyed by signs of cooling inflation and the Fed’s dovish comments. The yellow metal rose more than 8%, marking the biggest monthly gain since July 2020 and the first monthly gain since March.

As such, investors should tap the rally with the best-performing ETFs over the past month. iShares Gold Strategy ETF IAUF, iShares Gold Trust IAU, SPDR Gold Trust ETF GLD, GraniteShares Gold Trust BAR and Perth Mint Physical Gold ETF AAAU gained nearly 8% each and have a Zacks ETF Rank #3 (Hold).

Annual inflation slipped below 8% for the first time in eight months. The consumer price index rose 7.7% annually in October, after rising 8.2% at the end of September, while the core consumer price index, which strips out volatile components such as food and energy prices, climbed 6.3% year over year, down from 6.6% in September. The data renewed optimism in the stock market about the Fed‘s possibility of slowing its pace of interest-rate increases in 2023 (read: ETFs to Benefit From Dovish Fed Signals).

In the latest speech, Fed Chairman Jerome Powell signaled that rate hikes could slow as soon as next month. Traders now expect the Fed to increase rates by 50 bps in December, with the rates peaking in June 2023. Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion. A slowdown in the pace of rate hikes will provide some support to the yellow metal.

The Fed’s dovish comments also weighed on the U.S. dollar, bolstering the demand for gold. Notably, the U.S. dollar dipped to 16-week lows against a basket of major currencies.

Further, continued worries over lockdowns in China continued to raise demand for gold as a safe haven. This is because gold is often used as a means of preserving wealth during times of financial and political uncertainty. It usually does well when other asset classes struggle.

Here’s a detailed discussion on the five ETFs mentioned earlier:

iShares Gold Strategy ETF (IAUF)

iShares Gold Strategy ETF offers exposure to the price performance of gold and is designed to simplify tax filings as the fund does not require K-1 tax reporting. It has amassed $37.2 million in its asset base and trades in an average daily volume of 3,000 shares (read: Can Gold ETFs Rebound Ahead?).

iShares Gold Strategy ETF charges 25 bps in annual fees.

iShares Gold Trust (IAU)

iShares Gold Trust offers exposure to the day-to-day movement of the price of gold bullion. It is backed by physical gold under the custody of JP Morgan Chase Bank in London.

iShares Gold Trust charges 25 bps in annual fees. It is liquid and popular, trading in average daily volumes of 6.2 million shares and has AUM of $25.4 billion.

SPDR Gold Trust ETF (GLD)

SPDR Gold Trust ETF tracks the price of gold bullion measured in U.S. dollars and is kept in London under the custody of HSBC Bank USA. It is an ultra-popular gold ETF with AUM of $51.1 billion and a heavy volume of about 5.4 million shares a day.

SPDR Gold Trust ETF charges 40 bps in fees per year from investors.

GraniteShares Gold Trust (BAR)

GraniteShares Gold Trust is designed to seek the performance of the price of gold. It provides an investment similar to an investment in gold through a Trust without having to open a metal account (read: Gold Mining ETFs That Took Flight Last Week).

GraniteShares Gold Trust is also among the lowest-cost gold ETFs on the market, having an expense ratio of 0.17%. It has amassed $862.9 million in its asset base while trading in an average daily volume of 513,000 shares.

Perth Mint Physical Gold ETF (AAAU)

Goldman Sachs Physical Gold ETF offers investors an opportunity to gain exposure to gold without the complexities of gold delivery.

Goldman Sachs Physical Gold ETF has accumulated $419.1 million and trades in an average daily volume of 1.1 million shares. It has 18 bps in annual fees.

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SPDR Gold Shares (GLD): ETF Research Reports

iShares Gold Trust (IAU): ETF Research Reports

GraniteShares Gold Trust (BAR): ETF Research Reports

iShares Gold Strategy ETF (IAUF): ETF Research Reports

Goldman Sachs Physical Gold ETF (AAAU): ETF Research Reports

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Zacks Investment Research