Gold ETFs Explained: How They Work and How to Compare Them
Gold ETFs let you track the metal from a regular brokerage account. They look alike, but fees, size and structure differ. Here is what to compare before you buy.
Key takeaways
- Physically backed gold ETFs hold bars in vaults and track the spot price minus a yearly fee.
- Fees vary a lot: from about 0.10% to 0.40% a year among the best-known US funds.
- Large funds trade with tight spreads and have active options markets.
- In the US, gains on these funds are usually taxed at the collectibles rate, up to 28%.
How a gold ETF works
A physically backed gold ETF is a trust that buys gold bars and stores them with a custodian bank, usually in London or New York. Each share represents a fraction of an ounce. As gold's price moves, the share price moves with it. The trust sells a tiny amount of gold over time to pay its fee, so each share slowly represents a little less metal.
Popular US gold ETFs compared
| Fund | Ticker | Expense ratio | Known for |
|---|---|---|---|
| SPDR Gold Shares | GLD | 0.40% | Largest, most liquid, deep options market |
| iShares Gold Trust | IAU | 0.25% | Large, lower fee than GLD |
| SPDR Gold MiniShares | GLDM | 0.10% | Low fee, built for long-term holders |
Fees as reported in mid-2026. Funds can change them, so check the fund's own page before buying. This table is for comparison, not a recommendation.
What the fee costs you
On $10,000, a 0.40% fee is $40 a year and a 0.10% fee is $10. Over 20 years, the gap compounds into a noticeable difference. For buy-and-hold investors, a lower fee usually matters more than anything else. Active traders may prefer the largest fund for its tighter bid-ask spread and options.
Other things to check
- Tracking: compare the fund's return with the gold price over several years. The gap should be close to the fee.
- Bar lists: reputable funds publish the serial numbers of the bars they hold.
- Share price: some funds have a lower price per share, which helps if your broker does not offer fractional shares.
Gold ETFs vs. gold mining ETFs
Do not confuse a gold ETF with a gold miners ETF. A miners fund holds shares of mining companies. It tends to move more than gold in both directions and carries company risks. For the full comparison of ways to own gold, see How to Invest in Gold: 5 Ways Compared.
Taxes
The IRS generally treats physically backed gold ETFs like the metal itself: long-term gains are taxed as collectibles, at a maximum 28% rate. Holding them inside an IRA or 401(k) avoids that until withdrawal. A tax professional can confirm your situation.
See what a gold position is worth today with the gold investment calculator.
This article is general education, not personalized financial advice. Read our editorial policy and disclaimer.
