Gold ETFs are suddenly interesting again. After spending most of 2026 in the doghouse as investors braced for more Federal Reserve tightening, the stars are aligning for a comeback. Cooling inflation expectations, falling oil prices, a weaker dollar, and a surprisingly soft jobs report have all combined to improve the outlook for the Fed's interest-rate path—and that's great news for funds tied to physical gold and gold miners.

For much of the year, gold struggled as markets priced in additional rate hikes. But now, with traders starting to unwind those hawkish bets, bullion is showing signs of a rebound. And that's putting gold ETFs back on investors' radars.

Weak Jobs Data Changes the Fed Narrative

The big catalyst came Friday: the U.S. economy added just 57,000 jobs in June, far below the 115,000 economists had expected. That miss prompted traders to sharply reduce their expectations for another rate hike. Suddenly, the narrative that the Fed would keep tightening started to crack.

At the same time, oil prices have taken a dive after the reopening of the Strait of Hormuz restored Gulf crude supplies. Saudi Aramco's record reduction in its August official selling price has reinforced expectations that lower energy costs could translate into softer inflation in the coming months. The Cleveland Fed's inflation nowcast even points to negative month-over-month headline inflation readings for both June and July, strengthening the case that price pressures are easing faster than previously thought.

But don't get too comfortable. The broader hawkish narrative hasn't disappeared. The CME FedWatch tool shows that the odds of a rate hike in September have actually risen to around 56.7%, up from about 37.8% a month ago. The market seems to be wrestling with whether additional hikes beyond September—or into year-end—will materialize, given the oil-driven disinflation and weaker labor data.

Here's why that matters for gold: lower interest-rate expectations generally benefit the metal because gold offers no yield. When bond yields fall or are expected to decline, the opportunity cost of holding gold decreases, making it more attractive relative to interest-bearing investments. So the rising odds of a September hike are still a concern, but the overall direction of travel is more favorable than it was a few months ago.

A Weaker Dollar Adds Another Tailwind

The rally got an extra boost from currency markets. Because gold is priced in U.S. dollars, a weaker greenback makes bullion cheaper for overseas buyers, often boosting global demand and supporting prices. The Bloomberg Dollar Spot Index has lost momentum in recent sessions, with less than 1% return over the past month. That's enough to make dollar-denominated gold more affordable for international investors.

Analysts say the combination of softer employment data and a weaker dollar has created a favorable macro backdrop for precious metals after several weeks of pressure from expectations of higher-for-longer interest rates.

Gold ETFs Stand to Benefit

So which funds are best positioned to ride this wave? The largest and most liquid option is SPDR Gold Shares (GLD), the go-to choice for institutional investors despite its 0.4% expense ratio. GLD has spent much of the year under pressure as rising rate expectations weighed on non-yielding assets. If markets continue to unwind those expectations, the fund could be among the primary beneficiaries of renewed demand for gold exposure.

For cost-conscious investors, iShares Gold Trust (IAU) offers similar exposure with a lower expense ratio of 0.25%, making it attractive for long-term holders. And if you really want to minimize fees, SPDR Gold MiniShares Trust (GLDM) charges just 0.1% annually.

But if you're looking for more upside—and are willing to accept higher volatility—gold mining ETFs could outperform if bullion continues to climb. Funds like VanEck Gold Miners ETF (GDX) and VanEck Junior Gold Miners ETF (GDXJ) invest in companies whose earnings tend to rise faster than the underlying metal during sustained gold rallies. That gives them leveraged exposure to improving gold prices.

What Investors Should Watch Next

While the latest economic data have improved sentiment, the next major catalysts for gold ETFs will be the June CPI report and additional Federal Reserve commentary. The durability of the rebound will largely depend on whether the recent disinflation trend extends beyond energy prices. Core inflation remains elevated, meaning any upside surprise in CPI could quickly revive expectations for additional Fed tightening and pressure gold ETFs once again.

Conversely, if inflation continues to cool and markets further unwind their hawkish positioning, gold ETFs could extend their recovery after a difficult first half of the year.