3 Different Ways to Add Gold to Your Portfolio

Globe and Mail

31-05-2025

Gold has been on a tremendously strong run since 2024. That momentum has accelerated in 2025 with the yellow metal cracking the $3,000 per troy ounce level. It hasn't stopped there. Recently, the price of gold touched $3,500 before falling back.
Many investors may wonder if they should buy gold at these prices. The short answer is yes, and it's because of the reason why the price of gold is rising so sharply.
Even though consumers can buy gold bars at Costco Wholesale Corp. (NASDAQ: COST), retail investors haven't turned into wide-eyed gold bugs. The driving force behind gold's strong move is central banks around the world. They're gobbling up as much gold as they can.
Demand is down from its peak levels between 2022 and 2024, but it's still at historically high levels.
This modern-day gold rush started as a hedge against inflation and geopolitical uncertainty brought on by Russia's invasion of Ukraine. However, in 2025, the move to gold is a calculated move by central banks against a devalued U.S. dollar. In fact, some governments may be hedging for a world in which the dollar may not be the world's reserve currency.
Many technical signals show that the spot price of gold may be in a consolidation phase. That could be setting the stage for a jump higher. That's leaving some investors in a quandary. They may want exposure to gold, but they don't want to own the physical metal.
Here are three ways to capture some upside in gold without dealing with the logistics of owning physical gold.
Gold Miners Still Look Undervalued
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Gold prices have gone up, but prior to 2025, gold mining stocks have lagged behind other basic materials stocks. That's because, much like oil companies, gold miners need gold to be at a certain price to make extracting it a profitable activity.
This is showing up in the VanEck Gold Miners ETF (NYSEARCA: GDX), which is up 46.7% year-to-date. That's one way to play mining stocks. Another approach is to buy the best, which can lead investors to Newmont Corporation (NYSE: NEM). Newmont is one of the world's largest gold miners. In fact, it's a top holding of the GDX fund with a weighting of 11.5%.
In its most recent earnings report in April 2025, Newmont's revenue came in 24% higher year-over-year (YoY). However, it was the earnings growth that really got investors' attention. Newmont beat analysts' estimates by 37% and the $1.25 in earnings per share (EPS) was 127% higher YoY.
As of this writing, NEM stock was within 5% of the analysts' consensus price. However, at least two analysts have raised their price target on NEM stock with a price target of over $60 per share.
Own Gold and Trade It Like a Stock
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Fund investors have several options that give them exposure to gold. The GDX fund is one way. Another is the iShares Gold Trust (NYSEARCA: IAU). The fund owns gold that is transferred to the Trust in exchange for shares issued by the Trust. It's a way to own the right to physical gold without any of the logistics that come from owning the metal (i.e., storage and insurance).
Another obstacle to owning physical gold is what happens when investors want to sell. Owning shares of the IAU makes accessing your 'gold' as easy as selling shares.
As you might expect, the performance of the IAU fund closely approximates the performance of gold (it's up about 25% in 2025 as of May 28). Investors also benefit from an expense ratio of just 0.25%.
That means less money taken out by fees and a better total return over time.
A Strategic Way to Make Gold Even More of an Inflation Hedge
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One of the most cited reasons to own gold is that it works as an inflation hedge. If you believe that, the Strategy Shares Gold-Hedged Bond ETF (NYSEARCA: GOLY) deserves close attention.
This is a fund that tracks an index that provides broad exposure to investment-grade corporate bonds (in U.S. dollars) while using near-term gold futures to hedge inflation risk. The mix is about 90% investment-grade corporate bonds with 10% in Treasury bills.
Fund manager David Miller explains the benefit of the fund in this way: "The idea behind this is we think we could make gold better by adding a yield, or we think we can make bonds better by making them inflation protected."
The GOLY fund is up about 18.75% in 2025, which lags gold slightly. Still, the fund is up 27.75% in the last 12 months and could be headed much higher if inflation does ratchet higher.
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