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I think these UK shares and exchange-traded funds (ETFs) are worth investigating as they could deliver giant returns as gold demand rebounds. Here’s why.
Bouncing back
Gold’s rise to record peaks in 2025 was driven by fears over US trade policy. At $3,500 per ounce, the precious metal surged as markets worried about crushing tariffs and their impact on global growth and inflation.
The threat hasn’t gone away, but its impact on gold prices is greatly diminished. As we’ve seen in recent hours, markets seem accustomed to tough words on tariffs from President Trump before the White House sounds the retreat.
Does this mean gold’s bull run is over? Not in my book, as there are plenty of other factors that could drive the safe haven to new peaks. These include falling interest rate cuts, a weakening US dollar, and rising geopolitical tensions in the Middle East.
A fine fund
Modern investors have a multitude of options if they want to capitalise on a rising gold price. The first option is to purchase physical gold like bars or coins. The advantage is that investors have 100% control over the asset. However, buying and selling actual metal can be more complicated than other options, and can attract storage costs.
Another possibility is to buy a price-tracking ETF. The problem here however, is that — as with owning physical bullion — individuals don’t receive an income. They only benefit from a rise in the value of the shiny commodity.
To get around this, individuals can purchase an ETF that holds a basket of gold stocks. This is a path I’ve chosen with the L&G Gold Mining (LSE:AUCP) fund, which owns shares in 38 different bullion producers.
Some of the companies it holds (like AngloGold Ashanti, Kinross Gold and Newmont) pay a regular dividend to their investors. This is then reinvested back in the fund for further growth. Another advantage is that miners’ profits can rise faster than the gold price due to the leveraged effect.
The downside is that ETFs like this expose investors to the unpredictable. Though with holdings in a spectrum of different companies, the risk associated with this is reduced (if not totally eliminated).
Another golden opportunity
The final option investors have to play the gold market is to directly buy shares themselves. One that’s caught my eye is Serabi Gold (LSE:SRB).
Buying individual mining shares carries even greater risk due to a lack of diversification. But I think this could be baked into the cheapness of Serabi shares today. At 172.5p per share, the African miner trades on a forward price-to-earnings (P/E) ratio of 3.3 times. This reflects forecasts that annual earnings will rise 87% in 2025.
On top of this, Serabi’s forward dividend yield is a large 5.5%.
I think both this gold stock and the earlier gold ETF are worth consideration right now. In the case of Serabi, now could be a great time to take a look given its impressive recent operational performance.
Gold production rose 11% between January and March, to 10,013 ounces. And all-in sustaining costs (AISCs) dropped 12% to $1,636 per ounce, well below the current gold price.
