👉 Breaking Down the Gold Trade

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As a reminder, this specific deep-dive is written by the GRIT team and is not the work of Head Analyst Austin Hankwitz.

Commodity ETF Deep Dive: SPDR Gold Shares (GLD-US, $60B AUM)

The current state of the market can be summed up in one word…

Uncertainty.

And the market hates uncertainty.

We’re nearing peak tariff implementation which is causing economists to revise GDP growth estimates downward. Inflation tends to follow tariffs. There are cracks in the consumer. Tech stocks, which have held up returns for the better part of the past two decades, are also getting crushed on the back of worries that we may have overbuilt some of these data centers.

The outlook is bleak.

For YTD returns, after a strong start, we now have the S&P down -5%, the NASDAQ down -10% YTD, and ARKK down -14%.

But not all hope is lost. This knight in (very) shiny armor is up +17% YTD.

When everyone else zigs, it can pay off in a big way to zag.

This issue will be a little bit different because it will make the investment case for a commodity asset and explain different ways to invest in it.

Let’s jump in on this asset class and the best way to play it.

• Overview 👉 The Investment Case for Gold

• History 👉 How has Gold Performed as a Non-Correlated Diversifier?

• Miners 👉 Breakdown of Gold Mining Companies

• Future Contracts 👉 Explainer of Gold Futures Contracts

• Gold ETFs 👉 Largest Gold ETFs and How They Work

Overview 👉 The Investment Case for Gold

“Gold is money. Everything else is credit,” famed banker J.P. Morgan told Congress in 1912. Over a century later, his words still resonate. Investors flock to gold in times of uncertainty for its reputation as a safe haven and store of value. When inflation erodes paper currency or geopolitics rattles markets, gold often shines. It’s seen as an inflation hedge – since the U.S. left the gold standard in 1971, gold’s price has surged from $35 to over $2,000 by 2024 (a 5,700%+ increase in nominal terms), far outpacing the dollar’s lost purchasing power. Unlike fiat money, gold’s supply grows slowly, so it can preserve wealth when central banks are printing currency.

Another key appeal is diversification. Gold has little correlation with traditional assets, meaning it can zig when stocks zag. It tends to hold its value or even rise during market crashes or geopolitical crises, providing balance in a portfolio. As billionaire investor Ray Dalio put it, gold is “a diversifier against other assets” and a sensible 5–10% allocation for most portfolios​.

Beyond its financial traits, gold carries a psychological safe-haven status – a tangible asset with 5,000+ years of history as a trusted medium of exchange and wealth. Whether it’s currency debasement fears, recession risks, or war, investors turn to gold as portfolio insurance. In modern times, vehicles like SPDR Gold Shares (GLD) – the world’s largest gold ETF – have made owning gold as easy as buying a stock. GLD and similar funds let investors tap into gold’s timeless allure (inflation hedge, crisis insurance, non-correlation) without dealing with vaults and bullion. In short, the investment case for gold rests on its unique role as a scarce real asset that can protect and diversify wealth when it’s needed most.

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