Gold prices enjoyed a steady upward march last year to notch a gain of 70% — the highest annual return in 45 years. After setting 53 straight all-time highs, advisors are rightly asking if the “easy money” has already been made. But beyond just cyclical noise, the rally was powered by a potent mix of geopolitical tension, central bank buying, global retail demand for physical gold and a comeback for Western institutional ETF inflows. Not to mention, gold retained its luster amid bitcoin’s collapse. Now, as retail investors and speculators join the fray, advisors must now decide if this is a secular shift or a crowded trade.
As we enter 2026, gold ended January with its worst single-day drop in four decades. The recent “flash crash” was a perfect storm of Federal Reserve headline risk and a speculative unwind. Yet, the precious metal is still holding onto a 20% gain on the year. Investors are doubling down, funneling record assets into the State Street SPDR Gold Trust ETF (GLD) and digital gold-backed tokens. While spot prices have surged, gold miners have delivered a staggering 165% return, reiterating their role as a high-beta, leveraged play for investors voting with their wallets.
Continued Bull Case: A “New Normal” at $5,000+
Wall Street banks remain constructive on bullion, with many analysts seeing the recent volatility as a “cleansing” of speculative foam rather than a real trend reversal. Many significantly bumped up their year-end price targets after gold shattered the $5,000 barrier earlier this year. While some expect a mean reversion if geopolitical tensions fade, others believe we are in a period of structural re-rating.
| Bullish on Bullion | |
| Firm | 2026 Year-End Price Target |
| UBS | $7,200 |
| JPMorgan Chase | $6,300 |
| State Street | $6,000 |
| Goldman Sachs | $5,400 |
| Citigroup | $5,000 |
- Central bank buying: Central banks have gone from “binge buying” mode to a more price-sensitive approach to accumulation. With official holdings now accounting for nearly 20% of the total market, and many still far from their target, the underlying bid is expected to ramp up again this year.
- “Coiled spring” of retail: Retail asset allocation to gold remains remarkably low by historical standards, even as geopolitical risks intensify. Goldman Sachs estimates that gold ETFs account for just 0.20% of U.S. private financial portfolios, and that a mere 0.5% reallocation by global investors could send prices skyward – to the tune of $7,000 per ounce.
ETFs: Still Going for Gold (and Gold Miners)
Investment demand has shifted into high gear. February marked the ninth straight month of inflows for gold ETFs, with total assets reaching a record high of $701 billion, according to the World Gold Council. Global gold ETFs also enjoyed their strongest two-month start to a year on record after bringing in more than $5 billion in net inflows last month. While gold holds steady around $5,180, the real action has shifted to the miners, whose business benefits from a high barrier to entry. Massive operational leverage is currently at play, transforming steady gold appreciation into explosive, triple-digit gains for equity investors.
Core Allocation: Physical Exposure
For advisors seeking diversification and a direct hedge against inflation, currency debasement and sovereign risk, physically backed ETFs remain the ballast of a gold allocation. While GLD remains the liquid titan of the space with $178 billion in assets and $21 billion in inflows over the past year, the market has shifted toward low-cost alternatives. The SPDR Gold MiniShares Trust (GLDM) and iShares Gold Trust Micro (IAUM) have emerged as the “low-cost leaders,” offering expense ratios as lean as 0.09%–0.10%. Investors are responding in kind: GLDM has captured $3 billion in net inflows year-to-date ($10 billion over the last 12 months) to reach $33 billion in AUM. In fact, GLD and GLDM now have a combined total of $200 billion in assets under management. Similarly, IAUM has brought in $900 million this year, bringing its one-year haul to $4 billion. All three flagship funds are up roughly 20% this year.
Growth Opportunities: The Mining “Torque”
Massive margin expansion in the mining sector has driven gold miner ETFs to new heights. Miners have become “cash flow machines,” setting the stage for more M&A activity and dividend growth. Much of that is thanks to largely fixed production costs and gold’s record run. The VanEck Gold Miners ETF (GDX) remains the primary vehicle for broad exposure, managing $34 billion in assets and seeing $2 billion in fresh capital this year while posting an 18% year-to-date gain. GDX holds industry titans like Newmont, Barrick Gold and Agnico Eagle Mines. The Sprott Gold Miners ETF (SGDM) has emerged as the top performer. The fund is up 21% so far and a staggering 150% over the past year. SGDM uses a rules-based approach to prioritize companies with the highest revenue growth and the strongest balance sheets, such as Wheaton Precious Metals and AngloGold Ashanti.
Join the Conversation
We will explore the evolving role of gold at our upcoming Exchange conference panel on Tuesday, where my colleague Todd Rosenbluth will sit down with Aakash Doshi, Head of Gold Strategy, and Allison Bonds Mazza, Head of U.S. Wealth, at State Street Investment Management to discuss the playbook for gold in more detail — particularly as global debt climbs and geopolitical tail risks become embedded in the market regime.
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