Gold ETF Hits Record High Amid Favorable Market Conditions

The iShares Gold ETF (IAU) is riding a wave of momentum as the precious metal itself trades at unprecedented levels, surpassing $4,600 per ounce. This surge prompts the question of whether the fund can sustain its upward trajectory.

A combination of factors is fueling gold's sustained rally, which began in November 2025. Persistent geopolitical tensions and political uncertainty in the United States are driving safe-haven demand. Concurrently, market expectations for delayed U.S. Federal Reserve interest rate cuts in 2026 are pressuring real yields, enhancing the relative appeal of non-yielding assets like bullion. Structural demand from central banks seeking to diversify currency reserves remains a key pillar of support. Furthermore, a weaker U.S. dollar is bolstering the purchasing power of international buyers.

Fund Mechanics and Competitive Landscape

Structured as a physically backed grantor trust, the IAU fund holds allocated gold bars to track the spot price of the metal. This approach minimizes the replication risks associated with synthetic financial products.

Key metrics for the ETF include:
* Assets Under Management (AUM): Approximately $73 billion.
* Expense Ratio: 0.25%.
* Year-to-Date Performance: IAU is up roughly 6.75%, compared to gold's gain of just over 7%.
* One-Year Return: As of January 9, 2026, the fund has delivered a 67.2% return.
* Trading Volume: Average daily volume exceeds 9 million shares (1-month) and 10 million shares (3-month).
* Trading Deviation: Recently traded at a discount of about -0.6% to its Net Asset Value (NAV).

Should investors sell immediately? Or is it worth buying Gold-ETF?

IAU operates in a competitive field alongside the SPDR Gold Shares (GLD), which manages around $161 billion with a 0.40% fee, and the SPDR Gold MiniShares Trust (GLDM), with $26.4 billion in AUM and a lower 0.10% expense ratio. The performance of physically backed gold ETFs is typically very closely aligned, with differences primarily stemming from fee structures and operational efficiencies.

Price Outlook and Technical Levels

Looking ahead, forecasts from major traders project a gold price target near $5,000 per ounce by the end of 2026, with some estimates extending as high as $5,400 by late 2027. From a technical analysis perspective, immediate resistance is seen in the $4,600–$4,620 range. On the downside, support levels are identified around $4,580–$4,590, with stronger buffers at $4,500–$4,550 and $4,380.

The overall environment for gold, and consequently for the IAU ETF, remains constructive provided expectations for Fed rate cuts solidify and geopolitical uncertainties persist. While specific price targets may vary, the identified support and resistance zones offer clear reference points for potential price movements through the end of 2026.