Saltydog Investor looks at the funds that have regained their poise, for now.

Gold funds were the best-performing funds that we tracked in 2025.

SVS Baker Steel Gold&Precious Mtls B Acc (BNGMZG1) ended the year up 185%. WS Ruffer Gold C Acc (B8510Q9) and Ninety One Global Gold I Acc £ (B1XFGM2) both achieved annual returns of over 165%, while BlackRock Gold and General D Acc (B5ZNJ89) rose by 147%.

Their success followed a remarkable rise in the price of gold

Gold first broke through $3,000 an ounce in March 2025 and continued to climb throughout the year. In late January this year, it reached a new all-time high above $5,500.

There were several reasons for the rise. Political and economic uncertainty increased demand for gold as a safe haven. The wars in Ukraine and the Middle East were ongoing, while US President Donald Trump’s unpredictable approach to tariffs added further uncertainty.

At the same time, central banks, particularly in emerging markets, continued buying gold. For some countries, this was part of an attempt to reduce their dependence on the US dollar and US Treasuries.

The gold funds benefited from this trend because they invest in companies involved in mining and processing gold and other precious metals.

They do not exactly track the gold price, but they tend to follow a similar pattern. When gold rises, mining companies can sometimes do even better because many of their costs do not increase at the same rate.

The strong performance carried on into the beginning of this year, with the leading gold funds reaching new highs around the end of February.

Then things changed.

Following the US and Israeli strikes on Iran, gold briefly rose as investors sought protection. However, it then fell sharply as the safe-haven response faded and investors focused on the stronger dollar, higher Treasury yields and the need to raise cash. During March, it dropped below $4,300 an ounce, more than 20% below its previous high. The gold funds followed it down.

At the time, we were unsure whether this was a temporary correction or the start of a more sustained decline. The downturn proved to be relatively prolonged.

The gold funds continued to struggle throughout March, April, May, June and July, giving back a significant proportion of their earlier gains.

However, over the last few weeks the picture has changed again.

Gold has rebounded strongly during August. It has recently moved above $4,600 an ounce, reaching its highest level for more than three months. It is now up around 15% since the beginning of the month.

The gold funds have responded accordingly.

SVS Baker Steel Gold & Precious Metals, WS Ruffer Gold, BlackRock Gold & General and Ninety One Global Gold have all risen sharply from their recent lows.

There doesn’t appear to be a single reason for the recovery.

Softer economic and inflation data reduced expectations of further US monetary tightening, while a weaker dollar made gold more attractive to international buyers. A surprise decision by the US Treasury to expand buybacks of longer-dated government bonds initially pushed yields lower and weakened the dollar. It also revived concerns about US debt sustainability, supporting gold as both a non-income-producing asset and a potential hedge against currency and fiscal risks.

Gold also appears to be regaining some of its traditional safe-haven appeal. This was noticeably absent when the conflict with Iran first escalated earlier in the year.

For gold-mining funds, a rising gold price can have an amplified effect.

If the selling price of gold rises while mining costs remain relatively stable, higher revenues can feed through quickly to profit margins. That is one reason why gold-mining shares can rise faster than the underlying metal.

Unfortunately, the same effect can also work in reverse. That helps explain why these funds rose so dramatically in 2025, but then suffered such large falls earlier this year.

The recent rebound has been impressive, although the funds have not yet returned to their previous highs.

Whether this marks the beginning of another sustained rise remains to be seen. For the moment, however, the trend has changed and gold funds are heading back up our performance tables.

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