Today’s article is going to be short and sweet, as many of the CFR team members (myself included) are returning to Mayflower Hill and moving back in for another school year! That being said, today’s pick is a classic commodity, and with all of us turning off our summer brains and trying to lock back into school it’s a solid portfolio diversifier and risk hedge.
Overview
GLD is the SPDR Gold ETF, a fund issued by State Street that tracks the price of gold bullion. The fund does this by holding physical gold bars in vaults, primarily in London, and currently has roughly $150 billion in AUM. GLD is one of the most popular gold ETFs on the market, with an average daily trading volume of around 10 million shares.
Thesis
Now what makes this investment tricky is that Gold is not an income-producing asset. It thrives in a low-rate, weak-dollar environment, one we are not currently experiencing. With the recent jobs report crushing expectations and the ever-growing probability of a rate hike by the Fed, all signs initially point to not buying it. But it’s going into the portfolio anyway, for a few key reasons, with the first being the Central bank’s accumulation of it in 2026. According to the World Gold Council, about 288 tonnes of gold were purchased in Q2, giving the commodity legitimate structural backing (rather than short-term momentum). The second reason is its recent August correction, with GLD down about 5% from its high of $428.07, setting itself up with a considerably more attractive entry point. The third reason for the investment is the protection it can provide against geopolitical and fiscal instability, as well as inflation. With markets assigning a 58% probability of a rate hike by Warsh and Trump, on the other side of the coin, threatening to halt trade if the Fed doesn’t cut rates, both the bear and bull cases could play out on the 16th. On top of the rate uncertainty, the US and Iran continue to exchange missiles in the Middle East, adding to the volatility of it all.
Why-to-Buy
I believe that regardless of what happens in the near term with rates, GLD still offers the CFR portfolio exposure to a structurally sound commodity within a very AI- and tech-heavy makeup. DCA-ing into the asset would be the best way to invest, hedging risk if Warsh does, in fact, hike rates. As mentioned at the beginning, GLD offers a low-maintenance asset as the team here resets for the school year and gets ready to return to full swing. With its strong Central Bank buying, enticing price entry point off August highs, and a pillar of stability for the portfolio through the end of the year, GLD is CFR’s pick of the week!
