Likely helped by President Trump’s tariff initiatives, gold and related ETFs are on torrid paces to start 2025. Spot bullion and many of the ETFs are notching a series of record highs.
The WisdomTree Efficient Gold Plus Gold Miners Strategy Fund (GDMN ) is participating in that trend. The actively managed ETF is higher by more than 25% over the past month. That’s more than double the gains posted by the largest ETF backed by physical gold.
A move like that in such a short time frame might give some investors pause regarding embracing the actively managed GDMN. That’s a reasonable point of view. But some market observers believe the yellow metal still has multiple tailwinds. The world’s two biggest economies, U.S. and China, could fan some of those tailwinds.
Big Economies Loom Large for Gold
deVere Group CEO Nigel Green points out that a revaluing of the U.S. Treasury’s gold holdings could be a major catalyst for prices of the yellow metal. And that’s relevant to investors considering GDMN. That’s because the ETF’s portfolio includes the precious metal’s futures contracts.
Green said the Treasury currently values its bullion holdings at $42 an ounce. But if the department assigned today’s market prices to its held gold, its stake would be worth around $800 billion. That could contribute toward reducing U.S. dependence on bond issuance.
“Re-marking gold to its real market value could be a transformative financial event,” noted Green. “Re-marking gold to its real market value could be a transformative financial event.”
China Potential Catalyst for the Metal
Assuming that move occurs, it would likely result in higher prices for the metal. And that has broad implications for GDMN. That’s because in addition to futures exposure, the ETF holds shares of gold miners. That asset class is highly correlated to spot gold fluctuations.
China is a potential catalyst for a different reason. In addition to the People’s Bank of China’s (PBOC) voracious appetite for bullion – a long-standing catalyst unto itself – China recently said it will allow insurance companies to buy the yellow metal. That could send billions of dollars of fresh buying into the gold market.
“China’s green light for insurers will supercharge demand,” added Green. “These two factors alone would be enough to send gold prices soaring. But they’re hitting at a time when macroeconomic conditions already favor a prolonged rally in precious metals.”
That’s on top of PBOC buying that’s already at multidecade highs.
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