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The gold price rose to a new record overnight and the GDX ETF has followed suit today.
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The gold price rose to a new record of US$3,685 per ounce overnight, and the VanEck Gold Miners AUD ETF (ASX: GDX) followed suit on Tuesday, lifting to an all-time high of $105.92 per unit.
The GDX ETF gives investors exposure to a diversified portfolio of ASX and international gold shares.
Take a look at its trajectory over the past 18 months compared to the benchmark S&P/ASX 200 Index (ASX: XJO).
This ASX ETF has been a far superior investment compared to ETFs tracking the ASX 200 Index.
Image source: Getty Images
Gold continues to enjoy strong support as a safe-haven asset amid wars overseas and global trade uncertainty caused by US tariffs.
Central banks around the world, including in emerging markets, are highly motivated to buy gold, and this is fuelling the gold price.
Many countries want to diversify their reserves away from the US dollar, given the high US debt and global economic uncertainty.
Gold is in the midst of a stunning run, with the commodity’s value rising by more than 40% in the 2025 calendar year to date.
In the 2024 calendar year, the gold price rose by 27%, which was — at the time — the commodity’s best annual growth since 2010.
It looks like 2025 may deliver an even higher annual surge.
In fact, Michael Gable from Fairmont Equities reckons the gold price will run to US$4,000 per ounce this year.
On The Bull this week, Gable said:
After initially peaking in April, the gold price traded sideways for a few months before experiencing resistance near $US3,450.
It recently broke above that resistance line, and I expect the gold price to test $US4,000 an ounce during 2025.
Gable said he had been bullish on gold for several years, and this remains the case.
He added:
Central banks are continuing to buy gold.
Investors are starting to allocate more of their capital to gold in response to fears of increasing US Government debt and general global uncertainty.
Another motivation for investors to buy gold is the expectation of the US Federal Reserve cutting interest rates.
The Fed is meeting today and will announce its next move on interest rates tomorrow.
Rate cuts tend to push the yields on cash and bonds down, increasing the relative appeal of gold as a store of value.
The yellow metal’s strong gains over the past two years simply amplifies its appeal when bond and cash yields fall.
According to Reuters, global markets expect the Fed to cut rates by 0.25%. That would be the first cut since December 2024.
Peter Grant, vice president and senior metals strategist at Zaner Metals, said (courtesy Reuters):
Expectations of a 25-basis-point rate cut are largely baked into the cake at this point.
Grant said he thinks there could be one or two more interest rate cuts in the US by Christmas.
ASX gold ETFs provide a way to invest in the trend of rising gold without selecting individual stocks.
If only we’d listened to Gable back in April, when he recommended we buy GDX ETF at about $80 per unit.
In just five months, the ASX ETF has risen by 32%.
Today, Gable has a hold rating on the GDX ETF.
The GDX ETF invests in 62 stocks, with 44% in Canada, 18% in the US, 10% in Australia, and 7% in Brazil.
GDX was among the top 6 ASX international shares ETFs for best returns in FY25.
Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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