Gold back in focus

When uncertainty rises, investors often look for anchors. In 2025, gold was one of the assets that attracted renewed attention.

Gold delivered strong returns in 2025, with the Smart Gold ETF (GLD) gaining 60.73% (net of fees, before tax) in the calendar year. The momentum continued into 2026 with this fund rising a further 16.14% (net of fees, before tax) from 1st January to 28th February 2026.¹

Note: Past performance is not a reliable indicator of future performance.

Gold has always been more than a shiny metal. It’s widely viewed as a store of value and has long been used by investors to help diversify portfolios.

Diversification (not putting all your eggs in one basket) means spreading your money across different types of investments, so you’re not relying on just one.

When there is global economic uncertainty, people tend to turn to gold. That played out over the past year.

Why uncertainty reignited the demand for gold

Global trade uncertainty, conflict in the Middle East and the US government shutdown dominated headlines last year. Because of this uncertainty, many investors turned to gold to reduce their exposure to assets perceived to be high risk, including large US technology stocks.

2025 also saw investors discovering the convenience of buying gold via Exchange Traded Funds (ETFs). Investing in gold used to mean buying and storing physical bars, coins or jewellery. The Smart Gold ETF (GLD) offers investors the ability to access the gold market without needing to own gold bars.

Listed on the NZX, the Smart Gold ETF trades just like any share listed on the market, and it’s denominated in New Zealand dollars. That means investors can access gold exposure in New Zealand dollars without needing to manage foreign currency transactions. And because it’s a PIE fund, tax is capped at 28% - keeping things simple and efficient.

From launch in October 2024 to 28th February 2026, the Smart Gold ETF grew to over $65m in size, with most of this growth driven by retail investors.²

Will the Gold story continue in 2026?

Several forces that supported gold prices in 2025 remain in place.

Economic and geopolitical uncertainty hasn’t gone away, and confidence in traditional safe-haven assets, like government bonds, has weakened. At the same time, fewer investors are holding gold than a year ago, suggesting the gold trade may be less crowded than many assume.

As seen in the response of the gold price to the early geopolitical events of 2026, the precious metal may continue to attract interest during periods of 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 that seen during the COVID pandemic.

Longer term, gold could continue to benefit from the erosion of other traditional safe haven assets such as global government debt, where borrowing 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. This puts pressure on governments to try to keep bond yields lower to manage borrowing costs, which in turn makes US Treasury bonds less attractive relative to other assets.³

In 2025, gold overtook US Treasuries as the largest share of global central bank reserve assets for the first time since 1996.⁴ Central banks continue to purchase gold at high levels, with annual purchase volumes remaining above long-term averages for every year since 2022. Today, central banks hold around 20% of all mined gold.⁵

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 levels seen a year earlier.⁶

COMEX net long positions, 2024-2025

Looking across the ditch, Australian investment into commodities ETFs - including gold, silver and other precious metals such as platinum and palladium - more than doubled in 2025. However, total assets under management (AUM) are just $13 billion, less than 10% of AUM in global equities ETFs, and around 30% of AUM in fixed income ETFs in Australia.⁷

Despite Australian 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.⁸

A golden opportunity – with balance in mind

In today’s market environment, characterised by high levels of uncertainty and less effective diversification from government bonds, gold can play a useful role in a diversified portfolio.

Like any investment, gold isn’t risk-free. It doesn’t pay dividends, and it doesn’t generate income. However, over the long-term, gold has historically shown low correlation with traditional portfolio building blocks. This makes it a useful potential diversifier, particularly during periods of market stress.⁹

The Smart Gold ETF offers investors a convenient way to access pure gold exposure through a familiar listed investment vehicle.

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.¹⁰

The key is balance

Gold is usually held as a small (less than 10%) slice of a diversified portfolio, helping investors spread risk and add balance rather than rely on a single asset over the long term.

For wise investors, gold isn’t just about chasing returns. It’s about building a resilient portfolio - and choosing smart, efficient ways to diversify.

How can I access gold efficiently?

The Smart Gold ETF, launched in collaboration with iShares, provides investors with a simple way to access gold exposure without the hassle of managing physical gold, and in many cases at lower costs. Buying physical gold typically involves paying 2-5% above spot price, plus between 0.1-1% per year in storage fees.¹¹

In comparison, the Smart Gold ETF charges an all-in annual management fee of 0.55%, and can be bought, held and sold alongside other shares and ETFs through your preferred trading platform or financial adviser.

More from Smart

• Building a diversified investment portfolio with Smart Exchange Traded Funds (ETFs)

• Bullish on bullion? Discover gold’s role as a diversifier.

Footnotes

1. Source: Smart Gold ETF (GLD)

2. Source: Smart Gold ETF (GLD)

3. Source: BlackRock data as of 19 January 2026.

4. Source: BlackRock data as of 19 January 2026.

5. Source: BlackRock/World Gold Council data as of 19 January 2026.

6. Source: YCharts data, 20 January 2026.

7. Source: ASX data, 31 December 2025. 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.

8. Source: Ainslie Bullion, March 2025.

9. Bullish on bullion? Discover gold’s role as a diversifier.

10. Source: World Gold Council.

11. Source: Perth Mint, ABC Bullion, as of 29 January 2026.
    

iShares® and BlackRock® are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. BlackRock makes no representations or warranties regarding the advisability of investing in any product or the use of any service offered by Smartshares Limited.

Past performance is not a reliable indicator of future performance. Gold is a higher risk investment and should represent only a small proportion of a balanced portfolio. We recommend you seek professional assistance from a licensed Financial Advice Provider before making any investment decision.

The Smart Exchange Traded Funds are issued by Smartshares Limited (Smart). The product disclosure statements are available here.