Gold and Silver are back in the spotlight, with both metals rallying as equity markets stumble under the weight of renewed Trump-era tariff threats.
The rush into safe-haven assets has sparked fresh interest in precious metals—but owning physical bullion isn’t the most practical route for most investors.
Gold and silver ETFs offer a simpler, more liquid, and often more cost-effective way to get exposure. Here’s why they’re the better choice—and which funds are worth a closer look.
Why Buy a Gold or Silver ETF?
Gold and silver ETFs—technically structured as grantor trusts—hold physical bullion on your behalf and trade like any regular stock.
While they’re not ETFs in the strictest sense, they function similarly in practice. Each share represents a fractional ownership in the metal held by the trust, giving you direct exposure without the logistical headaches of physical ownership.
Buying physical gold or silver may seem straightforward, but it comes with real drawbacks. Dealers set their own bid and ask prices, which can lead to wide spreads and higher transaction costs. Then there’s the issue of storage and security. Whether it’s a home safe or a safety deposit box, protecting your holdings adds complexity and cost—especially if you need insurance.
And with both metals, the risk of counterfeiting is real. Larger silver bars can be filled with tungsten or lead to mimic the correct weight, while gold products like PAMP 1 oz bars are commonly targeted by counterfeiters when purchased outside trusted channels.
ETFs eliminate these concerns. You can trade them throughout the day, add them to your brokerage account or retirement portfolio, and avoid dealing with physical storage or authenticity verification.
They're also more tax efficient. Precious metal ETFs don’t pay out distributions, so there’s no income to report along the way—just potential capital gains when you sell. If you're looking for a cleaner, more practical way to invest in gold or silver, ETFs are the clear choice in my opinion.
My Favorite Gold and Silver ETFs
There’s no one-size-fits-all gold or silver ETF, but several standout options offer excellent liquidity, low fees, and accessibility depending on your goals—whether you're trading actively or building a long-term position.
For gold, the go-to choice for traders is SPDR Gold Shares (NYSE:GLD). With $93 billion in assets and a 0.01% 30-day median bid-ask spread, it's the most liquid gold ETF available.
It also boasts the deepest options chain in the space, giving active investors plenty of flexibility for strategies like covered calls or protective puts. That said, GLD carries a relatively high 0.4% expense ratio, and its high share price—around $287—means you’d need nearly $29,000 to build a 100-share options position.
For long-term investors looking for lower costs and smaller position sizes, SPDR Gold MiniShares (NYSE:GLDM) is a great alternative. It trades at a much more approachable share price of about $52 and charges a lower 0.18% expense ratio. It’s not as liquid as GLD and doesn’t support options trading, but for simple buy-and-hold exposure to gold, it’s more cost-efficient.
Two other strong contenders come from iShares. iShares Gold Trust (NYSE:IAU) charges 0.25% in fees and has ample liquidity with over $29 billion in assets. If you want an even lower-cost option, iShares® Gold Trust Micro (NYSE:IAUM) offers the cheapest exposure among major funds, with a 0.09% expense ratio.
Both funds are smaller and slightly less liquid than their SPDR peers, but they still suit a wide range of investing styles—from tactical trades to long-term hedges.
Turning to silver, iShares Silver Trust (NYSE:SLV) is the biggest name in the space. It holds over $15 billion in silver and tracks the LBMA Silver Price. Like GLD, it’s highly liquid with a 0.04% 30-day median bid-ask spread. However, its 0.5% sponsor fee is on the higher side, which adds up for long-term holders.
For a more cost-conscious alternative, abrdn Physical Silver Shares ETF (NYSE:SIVR) is worth a look. It charges a lower 0.3% expense ratio and stores its bullion in a London vault that’s inspected twice a year, with documentation published online. While it doesn’t have quite the same trading volume as SLV, it’s still a solid choice for long-term investors who prioritize transparency and lower costs.
Gold and Silver ETFs I’d Personally Avoid
I’m not here to call out specific tickers, but when it comes to investing in gold or silver, I strongly recommend sticking with physically backed grantor trusts. These funds hold actual bullion in secure vaults and offer the most straightforward, transparent way to gain exposure to precious metals.
The more exotic alternatives might look interesting on the surface—but they often come with complications that make them far less appealing.
One type I’d steer clear of is futures-based ETFs. These products use derivatives to track the price of gold or silver, rather than holding the physical metal. While they may seem like a convenient way to speculate on short-term price movements, they come with a laundry list of drawbacks.
First, there’s the potential tax headache: many issue K-1 forms, which can complicate your filings. They may also trigger capital gains distributions and tend to charge higher fees than physically backed options.
Then there’s contango—a pricing quirk in the futures market where contracts for future delivery cost more than the current spot price. When funds roll their contracts forward each month, they’re essentially selling low and buying high, which leads to persistent tracking errors and long-term performance drag.
I’d also avoid miner ETFs if your goal is pure exposure to gold or silver. These funds invest in the stocks of mining companies, not the metals themselves. While they often move in the same direction as bullion, they introduce equity risk and can be far more volatile.
Miners are essentially leveraged bets on metal prices—their profits soar when prices rise but get crushed when prices fall. That kind of exposure can work for aggressive traders, but it defeats the purpose if you’re trying to hedge against equity markets or inflation.
The same caution applies to leveraged (aka bull) and inverse (aka bear) ETFs that aim to deliver 2x, 3x, or -1x the daily return of gold or silver.
These products are designed for short-term trading and are prone to volatility decay, where daily compounding can produce major tracking errors over longer periods. Their performance often ends up looking very different from what you might expect based on the movement of the underlying metal.
If your aim is to hold gold or silver as a stable, uncorrelated asset, then simpler is better. Stick with physically backed ETFs like GLD, GLDM, IAU, IAUM for gold—or SLV and SIVR for silver. They’re cost-effective, tax-efficient, and more likely to deliver the exposure you’re looking for—without the extra baggage.