Gold ETF Prices Today: GLD, IAU, GLDM and More

What you actually own in a physically backed gold ETF

A physically backed gold ETF such as GLD or IAU is a grantor trust that holds allocated gold bars in a vault and issues shares representing an undivided interest in that gold. The share price tracks the gold price because large dealers can swap shares for gold, and gold for shares, whenever the two drift apart.

How creation and redemption keep the price honest

1. When shares trade above the value of the gold behind them, authorized participants, typically large banks and dealers, deliver gold to the trust and receive new shares in large blocks called baskets.
2. They sell those new shares on the exchange, which pushes the share price back down toward the value of the gold.
3. When shares trade below that value, the same firms buy shares cheaply and hand baskets back to the trust in exchange for gold.
4. The profit available from either trade keeps the market price close to net asset value through the trading day.

Individual shareholders cannot usually redeem shares for bars. Your exit is selling the shares on the exchange.

How net asset value is set

Each trust values its gold daily against a published benchmark; GLD, for example, uses the LBMA Gold Price PM, set at 3:00 p.m. London time. During U.S. trading the share price moves with spot gold in real time.

Why each share holds a little less gold every year

GLD launched in November 2004 with each share representing one-tenth of an ounce. The trust pays its sponsor fee by selling small amounts of gold, so the gold per share shrinks slowly. The table shows the effect over ten years at three example fee levels.

Each fund publishes its own expense ratio, and sponsors change them from time to time, so check the current figure in the fund’s documents.

GLD, IAU, GLDM, SGOL and SLV side by side

The large U.S. physically backed gold ETFs work the same way. The differences are in fees, trading volume and the price of a single share.

GLD

SPDR Gold Shares is the oldest and largest U.S. gold ETF and has the heaviest dollar trading volume and the deepest options market. Institutions and active traders favor it for that liquidity. It also carries a higher expense ratio than its newer competitors.

IAU and GLDM

The iShares Gold Trust (IAU) launched in January 2005. GLDM, launched in 2018, is a lower-cost sister fund of GLD from the same sponsor. Both charge less than GLD and trade at a lower price per share, which suits buyers adding small amounts regularly.

SGOL

The abrdn Physical Gold Shares ETF is another physically backed grantor trust with a fee below GLD’s. Like the others, it publishes a list of the bars it holds.

SLV and silver

The iShares Silver Trust uses the same grantor-trust structure for silver bars and receives the same collectibles tax treatment. The silver price page tracks the metal behind it.

What to compare between gold ETFs

• The expense ratio, which compounds year after year as shown above.
• The bid-ask spread and daily volume, which matter more for frequent traders than the fee does.
• The share price, since a lower price makes regular small purchases easier where fractional shares are not offered.
• Where the gold is vaulted and whether a bar list is published.
• Whether listed options exist, which matters only if you use them.

The collectibles tax on gold ETF gains

The IRS treats shares of a trust holding physical precious metals as an interest in the metal itself, which makes them collectibles. Long-term gains, on shares held more than a year, are taxed at your ordinary rate up to a maximum of 28%, instead of the 15% or 20% maximum rates on stocks. Short-term gains are taxed as ordinary income. The 3.8% net investment income tax can apply on top for higher earners.

The gold futures page explains the 60/40 rule.

The gold stocks page covers the mining companies that fall under ordinary capital gains rates.

Holding gold ETFs in an IRA

Inside a traditional or Roth IRA, gains are not taxed when you sell, so the collectibles rate does not apply at that point. ETF shares are listed securities, so an IRA can hold them like any other fund.

Tiny taxable sales you never made

Because the trust sells gold to pay its fee, each shareholder is treated as having sold a sliver of gold during the year. The amounts are usually very small, and the fund publishes annual tax information explaining how to report them.

Mistakes people make with gold ETFs

Most problems with gold funds come from misreading what a share is, not from the fund itself.

• Treating the GLD share price as the gold price. A share holds less than one-tenth of an ounce, so its price is a fraction of the ounce price.
• Choosing between funds on share price alone. A cheaper share does not mean cheaper gold; the fee and the spread are what cost you money.
• Forgetting the 28% collectibles cap when planning a sale in a taxable account.
• Buying a leveraged or futures-based product thinking it holds bars. Those funds can drift away from the gold price over time.
• Placing market orders in the first minutes after the stock market opens, when spreads are often wider.

Stock-market hours and the opening gap

Gold ETFs trade only during U.S. stock-market hours, 9:30 a.m. to 4:00 p.m. ET for the regular session, while gold itself trades almost around the clock. If gold moves overnight in Asia or London, the ETF opens at a new level to catch up. In the first minutes after the open, bid-ask spreads on even the largest funds can be wider than later in the day, and the share price can briefly trade at a small premium or discount to the value of its gold until arbitrage closes the gap.

Checking a fund against the metal

Divide the ETF’s net asset value by the gold per share it reports; the result should be close to the live gold price at the valuation time. A persistent gap means you are comparing different times, not that the fund has lost gold.

ETF shares or physical metal

An ETF avoids dealer premiums, shipping and storage, but you own a claim on a trust rather than metal in your hands. Physical coins and bars have no annual fee but cost more to buy and sell. The guide to where to buy gold compares the two routes on cost.

For a benchmark that does not depend on any fund, the gold spot price page shows the underlying market quote.