As Wall Street grapples with uncertainty, the S&P 500 and Nasdaq Composite have both experienced significant declines from their earlier highs in 2025, with the Nasdaq down over 15%. This turbulence has many investors seeking safer investments, and for some, gold is the answer. As geopolitical tensions and fears of a global recession mount, the price of gold has surged by nearly 25% in 2025, reaffirming its status as a traditional safe-haven asset.
If you’re contemplating adding gold to your portfolio during these uncertain times, there are two exchange-traded funds (ETFs) that offer a convenient and efficient way to invest in the precious metal, without the need to physically own gold bars.
Why Investors Are Turning to Gold
In times of economic instability, investors often move toward more conservative options. This might include switching to cash, focusing on sectors deemed safer, like utilities and consumer staples, or buying bonds. However, a particularly popular move during market turbulence is buying gold. Gold is often seen as a store of wealth, providing stability when stock markets are volatile. It also retains its intrinsic value, unlike stocks, which can drop to zero if a company goes bankrupt.
While gold is not without risk—its value is tied to fluctuations in price—it is generally viewed as more stable than equities during market downturns. However, it’s important for investors to carefully consider how much exposure they want to gold, typically limiting it to around 10% of their portfolio, as stocks have historically outperformed gold over the long term.
Three Ways to Buy Gold
There are a few ways to invest in gold, ranging from physical bullion to ETFs. While buying physical gold can be costly due to transaction fees and storage requirements, ETFs provide a much more efficient means of gaining exposure to gold.
VanEck Merk Gold Trust (OUNZ)
The VanEck Merk Gold Trust is one of the most straightforward ETFs for those looking to track the price of gold. This ETF directly owns gold, and its price will largely follow the movement of the metal itself. The ETF offers a unique feature: shareholders have the option to exchange their shares for physical gold bullion. While this option might not be practical for smaller investors due to associated costs, it provides a hybrid approach for those who want exposure to gold while retaining the flexibility to convert to physical bullion if needed.
The expense ratio for this ETF is a reasonable 0.25%, considering the costs involved in storing and safeguarding the gold. It’s a solid choice for investors looking for a direct link to gold prices without the hassle of managing physical gold themselves.
VanEck Gold Miners ETF (GDX)
For investors who are hesitant to buy pure gold due to its lack of growth potential, the VanEck Gold Miners ETF offers a more dynamic option. This ETF invests in gold mining companies, which, unlike gold itself, can grow and reinvest in their operations. The fund provides diversified exposure to precious metal miners from around the world, with U.S. stocks making up only about 16% of the portfolio.
While the expense ratio of 0.51% is a bit higher compared to the VanEck Merk Gold Trust, the potential for growth through the underlying mining companies makes it a compelling choice for those looking for more than just a passive investment in gold. Since mining stocks tend to track the price of gold over time, this ETF offers a way to benefit from the potential upside in gold prices while maintaining exposure to equities.
Should You Add Gold to Your Portfolio?
Before diving into gold ETFs, it’s crucial to assess whether gold fits within your broader investment strategy. If you’re already heavily invested in sectors like utilities and consumer staples, you might not need additional safety from gold. Moreover, investing in commodities or commodity-driven stocks comes with its own set of risks and limitations, so it’s important to weigh these factors against the potential benefits of gold.
Both the VanEck Merk Gold Trust and VanEck Gold Miners ETF provide a convenient, efficient way to gain exposure to gold. The former gives you direct exposure to the price of gold, while the latter offers a more growth-oriented approach by investing in gold mining stocks. Whether you choose to invest in gold directly or through mining stocks depends on your risk tolerance and investment objectives.
In any case, while gold can be an effective way to hedge against uncertainty, it should only form a part of a well-diversified portfolio. If you’re considering it as an addition, think carefully about how much exposure you want and whether it aligns with your broader investment goals.
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