What Are Gold ETFs, and Should You Invest in Them?

Gold has been on a hot streak lately, hitting record high values in 2025. The spot price of gold has soared nearly 43% in the past year, according to data from gold broker APMEX. It currently stands at about $3,300 per ounce.

Many investors are looking to gold as a way to diversify their portfolios, but not everyone wants to ship and store physical gold. Fortunately for them, there is a way to invest in gold without actually buying gold.

Gold ETFs track the value of this precious metal and are an easy way to get in on the hot gold market. Keep reading for everything you need to know about this investment option.

What are gold ETFs?

An ETF is an exchange-traded fund. They are like mutual funds in that they can contain a collection of investments, but they are bought and sold in the same way as stocks. A gold ETF is a fund that is designed to track the price of gold.

To do that, a gold ETF typically owns gold that is held in a vault. Or, less commonly, its investments could be gold derivatives, such as gold futures.

Pros and cons of investing in gold ETFs

These investments may not be for everyone, though. For gold investors, here are the pros and cons of gold ETFs.

How to invest in gold ETFs

Investing in gold ETFs is a relatively straightforward process. Follow these steps to get started.

1. Open an account: You’ll need a brokerage account to buy and sell gold ETFs. Fidelity, Vanguard, and Robinhood are a few of the companies that allow individual investors to make trades with no fees. If you don’t want to buy and sell ETFs yourself, you could open an investment account with a firm such as Edward Jones and have a financial adviser manage your portfolio instead.
2. Compare ETFs: Next, you need to decide which gold ETFs to purchase. Funds can cost anywhere from $15 to more than $300 per share. In addition to selecting ETFs that fit your budget, you’ll want to consider the investments they hold—such as physical gold or derivatives—and their administrative costs. Typically, any fund that charges more than a 1% expense ratio (an annual fee charged to cover the ETF’s operating costs) is considered a high-fee fund.
3. Purchase with a plan: Finally, it’s time to purchase your gold ETFs. You can either do this yourself through your brokerage account or have your financial adviser complete the transaction on your behalf. When you make this purchase, have a plan for how the gold ETF fits into your overall investment strategy. Will you hold your shares long-term or use them as a short-term hedge during economic uncertainty?

Top performing gold ETFs

Since gold ETFs are designed to track the value of gold, many have similar growth rates. Here are some of the top performers so far for 2025.

*As of May 30, 2025

Gold ETFs vs. physical gold

Both gold ETFs and physical gold can help you diversify your portfolio with precious metals, and each holds its own appeal.

You may want to invest in gold ETFs if …

• You want to manage your gold investment within a brokerage account.
• You have a smaller amount of money to invest.
• You want a maintenance-free investment.

On the other hand, physical gold may make sense if …

• You want the peace of mind of owning your own gold.
• You have a secure place to store physical gold.
• You have a larger amount of money to invest in precious metals.

For more on how gold ETFs compare to physical gold, see our guide to physical gold vs. gold ETFs.

Should you buy gold ETFs?

There is no one gold investment strategy that works for everyone. If and how to invest in gold depends on a variety of factors such as your risk tolerance, financial goals and personal preferences.

Here are some questions to ask yourself when deciding whether to buy shares in a gold ETF:

• Why do I want to own gold? If you are looking to diversify your portfolio with gold, an ETF may be a good choice. If you are worried about economic uncertainty and want a tangible asset to fall back upon, buying physical gold may be a better fit for you.
• How much time do I have to devote to my investment? Buying physical gold requires more time and knowledge. You’ll need to consider what type of gold to buy, compare prices to find the best deal and arrange for shipping and storage. Some people enjoy the process of buying physical gold, but if it sounds like a hassle to you, consider a gold ETF instead.
• How much money do I have to invest in gold? It’s not uncommon for physical gold dealers to have minimum purchase requirements that can range anywhere from $5,000 to $25,000 or more. If you want to make a smaller investment in gold, you can purchase a share of many gold ETFs for less than $50.

Ready to learn more about gold investments? Check out the top companies for gold IRAs and learn how you can save for retirement with gold and get tax advantages at the same time.