“Gold Hits All-Time High: Top 5 ETFs to Ride the Rally”

Gold Prices Surge to All-Time Highs, Investors Eye ETFs for Exposure

Gold has been on a remarkable rally in recent months, hitting a new all-time high above $2,550 per ounce. The precious metal has surged more than 24%, outperforming the broader market index, and the trend is expected to continue, especially with the looming Fed rate cuts next week.

Investors are optimistic about the future of gold and have a variety of options to tap into the metal’s rally. Here are the five most popular ETFs directly linked to the spot gold price or futures to gain exposure to the metal: SPDR Gold Trust ETF (GLD), iShares Gold Trust (IAU), SPDR Gold MiniShares Trust (GLDM), Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL), and iShares Gold Trust Micro (IAUM). All these ETFs have a Zacks ETF Rank #3 (Hold).

Recent economic data points to a slowdown, reinforcing expectations for Fed rate cuts. The United States added 142,000 jobs in August, below the anticipated 160,000, signaling continued cooling in the labor market. Inflation has also eased, with the Consumer Price Index rising 2.5% year over year in August, down from 2.9% in July. This, coupled with a 0.2% increase in the producer price index, supports the case for Fed rate cuts.

Market participants are pricing in an 85% chance of a 25 bps rate cut and a 15% chance of a 50 bps cut next week, according to the latest CME FedWatch Tool. Lower rates make gold more attractive compared to fixed-income assets like bonds, as rising U.S. interest rates increase the opportunity costs of holding non-yielding bullion and weaken the U.S. dollar.

Geopolitical tensions and election uncertainty have also boosted the appeal of gold as a safe-haven asset. Gold is often seen as a store of wealth during times of financial and political uncertainty, performing well when other asset classes struggle. Strong physical buying from central banks and investors in Asia has further supported the metal.

For investors looking to capitalize on the soaring gold prices, the highlighted ETFs offer exposure to the metal’s rally. SPDR Gold Trust ETF (GLD), iShares Gold Trust (IAU), SPDR Gold MiniShares Trust (GLDM), Aberdeen Standard Physical Swiss Gold Shares ETF (SGOL), and iShares Gold Trust Micro (IAUM) provide different avenues for investors to participate in the gold market.

In conclusion, the surge in gold prices, coupled with expectations of Fed rate cuts and geopolitical uncertainties, make gold ETFs an attractive option for investors seeking exposure to the precious metal’s rally. As the market continues to evolve, these ETFs offer a convenient and efficient way to capitalize on the current gold trend.