-
The 5 Best Gold ETFs to Buy for Sticky Inflation in 2025
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.
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:
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.