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Market Analysis2026-02-09
Gold ETF Record High 4964
Gold prices have surged to a record high of $4,964 per ounce. The GLD ETF has delivered an annual return of 72.4%, driven by central bank gold purchases and expectations of a weaker dollar.
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The gold market continues its unprecedented rally. Spot gold prices have surged to $4,964 per ounce, putting a $5,000 breakthrough within sight. The GLD (SPDR Gold Shares) ETF has reached $455, delivering a remarkable annual return of 72.4%. Ray Dalio has commented that "gold's rise of over 70% in the past year reflects doubts about the value of currency." Sustained central bank gold purchases and geopolitical uncertainty are the key drivers pushing gold prices higher.
Central Bank Gold Purchases Hit Record Highs
In 2025, central banks worldwide purchased a total of 328 tons of gold, with a monthly average of 27 tons — a historically elevated pace. Emerging market central banks in China, India, Turkey, and others continue to pursue de-dollarization by reducing their dollar asset holdings and expanding gold reserves. This trend forms a structural foundation for rising gold prices and provides downside support even during short-term corrections. GLD's assets under management stand at $167.6 billion, maintaining its dominant position as the largest gold ETF by a wide margin.
GLD vs. IAU: Comparing Gold ETFs
When investing in gold ETFs, investors must choose between GLD and IAU. GLD carries an expense ratio of 0.40%, higher than IAU's 0.25%, but its trading volume is overwhelmingly larger, offering superior liquidity. Investors who move large sums or trade frequently will benefit from GLD, while those holding for the long term may prefer IAU's lower expenses for better compounding. IAU is currently posting similar returns, making it important for investors to choose based on their own investment style. An asset allocation calculator can help optimize the appropriate gold allocation.
The Role of Gold in a Portfolio
Adding gold at a 5–10% weight to a traditional 60/40 portfolio is widely known to meaningfully reduce overall volatility. As of 2026, gold's low correlation with equities places it in a phase where diversification benefits are maximized. Particularly during periods when inflation concerns resurface, GLD — alongside TIP (inflation-linked bonds) — plays a role in preserving real purchasing power. It is worth using a rebalancing calculator to check whether gold's allocation has exceeded its target, and to consider taking profits from the appreciation and reallocating to bonds or equities.
Outlook: Will Gold Break $5,000?
Goldman Sachs has set a year-end 2026 gold price target of $5,500, maintaining a bullish outlook. The key upside drivers include expectations of Fed rate cuts, the potential for a weaker dollar, and ongoing geopolitical risks. However, a reversal toward dollar strength or a shift back to rate hikes could trigger a sharp short-term pullback. GLD's five-year annualized return of 21.8% underscores its appeal as a long-term investment. Adjusting gold ETF allocations is best decided in the context of the overall portfolio using an asset allocation calculator.
Conclusion
With gold prices now approaching $5,000, gold ETFs such as GLD and IAU have become core tools for portfolio diversification. However, an annual return of 72% also carries the risk of short-term overheating. Existing holders should manage their allocation through rebalancing, while new entrants would be wise to consider a dollar-cost averaging approach. Over the medium to long term, the global de-dollarization trend and sustained central bank purchases are expected to provide structural support for gold prices.
