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iShares Physical Gold ETF (GLDN)
https://www.blackrock.com/au/products/332696/
This product is likely to be appropriate for a consumer:
• who is seeking capital preservation and/or capital growth
• using the product for a minor allocation of their portfolio or less
• with a minimum investment timeframe of 5 years, and
• with a high to very high risk/return profile
After gaining more than 50% in 2025, gold has already risen by another 10% so far this year. With ongoing political and economic uncertainty, gold prices could keep climbing - here’s how investors can get involved.
Key takeaways
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01
Gold prices have risen around 15% just a month into 2026, coming off a more than 50% jump in 2025 and record global flows to gold ETFs last year1
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02
While headlines around investors queuing for gold may raise alarm bells2, data shows the gold trade is less crowded than a year ago, with rising government debt and geopolitical uncertainty helping to keep prices elevated3
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03
Longer-term, gold’s low correlation with traditional portfolio building blocks make it a useful potential diversifier4, with ETFs offering a convenient vehicle for pure gold exposure
Uncertainty reignites demand for gold
As headlines around global trade uncertainty, conflict in the Middle East and the US government shutdown dominated headlines last year, investors flocked to gold as a hedge against growing geopolitical risks. The LBMA Gold Price Index surged by around 55% in 2025 in Australian dollar terms, continuing a more than 70% price rise since US President Trump was elected in November 2024.5
Last year was also seemingly the year investors discovered the convenience of ETFs for gold access. Gold ETFs took in US$89 billion globally in 2025, a huge jump from US$4 billion in net flows in 2024.6 The total amount of gold bullion held by gold ETFs worldwide also hit a new record at 3932 tonnes – 0.4% higher than the previous record at the height of the COVID pandemic in October 2020.7
Regional gold ETF flows and the gold price
Past performance is not a reliable indicator of future performance. Past flows into ETFs are not a guide to current or future flows and should not be the sole factor of consideration when making an investment decision.
With investors greeted by similar levels of uncertainty in 2026 as disputes over Venezuela and Greenland dominate headlines, as well as a snap election in Japan, gold has continued its outsized performance. While prices have been volatile in early February, the precious metal is still up around 15% for the year to date8.
At the same time, iShares gold ETFs have seen around US$12 billion of global flows so far in Q1, equalling Q4’s total flows just a month into the year.9
The story continues
While it’s understandable to question whether 2025’s exceptional run for gold was a one-off, we think the underlying drivers supporting price growth remain strong.
Ongoing investor demand - driven by persistent macroeconomic uncertainty and loss of faith in other traditional safe have assets - is set to continue this year, while investor positioning in gold has dropped off slightly versus a year ago, indicating the gold trade may not be as crowded as people think.
As seen in the response of the gold price to the early geopolitical events of 2026, it’s likely the precious metal will continue to benefit from a risk premium associated with global uncertainty.
BlackRock’s geopolitical risk indicator – which tracks the frequency of broker reports associated with specific risks – is currently at a similar level to the COVID pandemic, with risks such as Middle East war, major cyber attacks and terrorism rated as ‘high likelihood’.
Longer term, gold is also likely to benefit from the erosion of other traditional safe haven assets as global government debt continues to rise. As seen in the chart below, debt-to-GDP ratios have now passed 100% in many major developed economies, including the US, Japan and the UK.
Key countries government debt to GDP ratio (%)
Source: IMF, 15 December 2025
In the US in particular, interest payments now account for 13% of total government spending, forcing governments to maintain lower yields to manage borrowing costs which in turn makes US Treasury bonds less attractive10. In 2025, gold overtook US Treasuries as the largest share of global central bank reserve assets for the first time since 1996.11
Central banks continue to purchase gold at high levels - with annual purchase volumes remaining above long-term averages for every year since 2022 – and now hold around 20% of all mined gold.12
Yet outside of central banks, we don’t see investors as particularly overexposed to gold. As seen in the chart below, net long positions in the COMEX - a key measure of how many investors are holding gold futures globally - declined during the gold price rally in the final quarter of 2025, and are now around 20% lower than a year ago.13
COMEX net long positions, 2024-2025
Source: LSEG Datastream, December 2025
In Australia, despite media reports of hours-long queues to buy gold during the Q4 2025 rally, only around 1% of retail investors are estimated to hold physical gold.14
While local investment into commodities ETFs – including gold, silver and other precious metals such as platinum and palladium – has grown over 100% in 2025, total assets under management are just $13 billion, less than 10% of AUM in global equities ETFs, and around 30% of AUM in fixed income ETFs in Australia.15
A golden opportunity
In today’s market landscape, characterised by high levels of macro uncertainty and less effective diversification from government bonds, we believe gold forms a key part of the diversification toolkit for your portfolio. As a relatively volatile asset class, it makes sense for investors to consider exposure to gold as part of a broader range of investments, rather than concentrated exposure.
Gold’s low correlation with several other commonly held asset classes makes it a valuable defensive player in your portfolio, which may help to offset the effects of a temporary market downturn in equities or bonds – as seen in the table below.16
Gold correlation to major indices, 2015-2025
Source: World Gold Council. Based on monthly returns for gold (represented by LBMA Gold Price), Australian shares (represented by MSCI Australia Index), Global bonds (represented by Bloomberg Global Aggregate Index) and Australian bonds (represented by ICE BofA Australia Corporate Index) from 31 December 2015 – 31 December 2025. Negative correlation score means the asset classes move in the opposite direction. Correlation of 0-0.5 means asset classes don't often move in the same direction. Correlation of 0.5-1 means asset classes often move in the same direction. Diversification and asset allocation may not fully protect you from market risk.
When it comes to gold exposure, as the recent flow numbers reveal, ETFs are becoming an increasingly popular way for investors to tap into the gold market.
This is because they offer more convenience and in many cases lower costs than owning gold directly – providers usually charge a fee of around 2-5% above spot price for a gold purchase, plus between 0.1-1% per year in storage fees, with higher fees for smaller amounts.17
In comparison, gold ETFs charge an average annual management fee of 0.29% - with the iShares Physical Gold ETF (GLDN) priced at 0.18% - and can be purchased and held alongside existing shares and ETFs through your preferred trading platform.
Gold mining stocks are also gaining popularity as an alternative way to gain exposure to the current gold boom. While gold and gold equities have typically generated similar performance over time, pure gold exposure tends to exhibit less volatility, making it a potentially superior choice for investors looking at tapping into gold for portfolio diversification purposes.18
Ultimately, we see price support for gold continuing in 2026, with the same trends that fuelled the precious metal’s rapid growth in 2025 still firmly in place.
