Investors are going for the gold.
Between escalating trade tensions and rising recession risks, buyers are flocking to the textbook safety trade to protect their portfolios, driving gold prices to six-year highs.
But gold itself isn't the only trade benefiting from the latest risk-off moves: Gold-based exchange-traded funds are seeing huge inflows, with total ETF gold holdings last week hitting their highest level since 2013.
That means investors are rushing to gold-backed ETFs — which include the SPDR Gold Shares ETF, ticker GLD; the VanEck Vectors Gold Miners ETF, ticker GDX; and the GraniteShares Gold Trust, ticker BAR — at a pace not seen in years.
"I think their rationale is they're looking for a place to hide from the volatility," Andrew McOrmond, managing director of ETF trading solutions at WallachBeth Capital, said Monday on CNBC's "ETF Edge."
With the Cboe Volatility Index — a widely followed volatility indicator that's also known as the market's fear gauge — seeing roughly 15 swings of 10% or more in both directions in the last three months, people are looking for a stable hedge, McOrmond said.
Gold's 23% year-to-date gain, safe-haven quality and potential to head even higher is looking increasingly attractive, he said.
However, when it comes to deciding between the gold-backed funds, experts are split on which ones can deliver the best value to investors.
McOrmond said he prefers the gold-miner-focused GDX, which counts the stocks of Barrick Gold and Newmont Goldcorp among its top holdings, "because the ETF dampens single-stock risk that can come with those mining stocks."
But those who are more comfortable investing in the precious metal itself might find BAR worth considering, which he said is no different than the ever-popular GLD, "except it's half the cost."
At a 17-basis-point charge, BAR "is the alternative to having a vault in your house and putting gold in it," McOrmond said, adding that BAR's spread is so small at 1 or 2 cents, that trading in and out of it is quite cheap.
Steve Grasso, managing director of institutional trading at Stuart Frankel, warned that while investing in GDX may produce outsized gains relative to the others — the fund is up 40% this year versus the GLD's 19% gain — it could also lead to outsized losses.
"GDX has always outperformed, both up and down," he said in the same "ETF Edge" interview. "We've seen the outperformance [ratio as], sometimes 3 to 1. Now we see it as 2 to 1. But they're masters of their own destiny."
In the meantime, Grasso had his eye on gold's relationship with another burgeoning safety trade: bitcoin.
"Never underestimate the effect that the central banks can have on gold and on bitcoin," Grasso said. "When you have these risk-on moments where you see the central banks are devaluing everything, people rush back into gold and I think that's what you're seeing now."
And, as the inverse correlation between gold and bitcoin fades amid investors' flight to safety wherever they can get it, the same is happening with gold and the U.S. dollar, Grasso noted.
"Those correlations don't seem to be working, to your point," he said. "It's the basket of the global concerns versus the basket of people worrying about governmental intervention. I think that's what you're seeing, the two dynamics that are playing [out]."
Gold prices held near their six-year highs late Monday, while GLD and BAR slid less than 0.1% after making new 52-week highs. GDX was also down, shedding less than 1%, while bitcoin gained more than 2%, according to CoinBase.
