Gold entered the final part of the third quarter of 2026 after a significant rally, but volatility has also increased as expectations for U.S. interest rates and inflation have shifted. For investors following SPDR Gold Shares, or GLD, recent developments highlight the tension between structural demand for gold and the metal’s sensitivity to macroeconomic conditions and movements across financial markets.

GLD Provides Exposure Through Physical Gold

GLD was launched in November 2004 and is designed to reflect the performance of gold bullion prices, less the fund’s expenses. The fund holds physical gold and remains one of the major U.S. vehicles for gaining exposure to the metal’s price. As of September 2026, the fund’s gross expense ratio stands at 0.40%, and its shares trade in U.S. dollars on NYSE Arca.

This structure allows investors to gain exposure to gold prices without directly holding physical bullion. However, GLD’s performance remains primarily dependent on movements in the price of gold, making interest rates, the dollar and global demand important variables for fund holders.

A 13% August Rally Reshaped the Market Picture

Gold prices rose 13% in August and ended the month at $4,563 per ounce. According to World Gold Council data, it was one of the strongest monthly gains for gold in the past quarter-century. At the same time, physically backed gold ETFs globally recorded approximately $18 billion in inflows, while their assets under management increased 16% to $615 billion.

The scale of these inflows highlights the role ETFs play in gold-market flows. When gold prices rise and demand for physically backed financial products strengthens, investment flows can reinforce market momentum. Conversely, changes in interest-rate expectations or real yields can reduce gold’s relative appeal and trigger capital outflows.

Central Banks Remain a Significant Market Factor

Alongside investor activity, central-bank demand continues to provide structural support for the gold market. Net central-bank purchases totaled 289 tonnes in the second quarter of 2026, a significant increase from 57 tonnes in the first quarter based on revised data. Poland was the largest buyer during the quarter, while China added 33 tonnes, increasing its gold reserves to 2,346 tonnes at the end of June.

Meanwhile, total gold demand during the first half of 2026 reached 2,522 tonnes, up 2% from the same period a year earlier and representing a record value of approximately $380 billion. However, physically backed gold ETFs recorded outflows of 45 tonnes during the second quarter, showing that strong structural demand does not eliminate the market’s sensitivity to price movements and financial conditions.

Looking ahead through 2026, attention will remain focused on the balance between demand from central banks and investors and the direction of interest rates and the U.S. dollar. Capital flows into gold ETFs, inflation data, real yields and Federal Reserve policy are also likely to influence the direction of gold and GLD. For Israeli investors, movements in gold prices and the dollar may be particularly relevant because the shekel-denominated return from dollar exposure is also affected by exchange-rate movements.