4 Leveraged Gold ETFs
What Are Leveraged Gold ETFs?
- Purpose: Leveraged gold ETFs aim to deliver 2× or 3× the daily return of gold prices or gold-related indexes.
- Mechanism: They use futures contracts, swaps, and debt instruments to magnify returns.
Types:
- Long leveraged ETFs (e.g., UGL, DGP) profit when gold prices rise.
- Inverse leveraged ETFs (e.g., GLL, DZZ) profit when gold prices fall.
Risks and Considerations
- Daily Reset: These ETFs reset daily, meaning their performance over longer periods may diverge sharply from the underlying index.
- Volatility Drag: In volatile markets, compounding effects can erode returns, even if the underlying asset trends upward.
- Liquidity Issues: Some leveraged ETFs have low trading volumes, which can lead to wider bid-ask spreads and higher trading costs.
- Not for Long-Term Holding: These are short-term trading tools, not buy-and-hold investments.
- Complexity: Due to their structure, they’re best suited for sophisticated investors who actively monitor positions.
Leveraged gold ETFs can be powerful tools for short-term speculation or hedging, but they require active management and a clear understanding of the risks. For most investors, traditional gold ETFs or physical gold exposure may offer a safer path to portfolio diversification.
- Amplified Exposure: Leveraged ETFs use financial derivatives to magnify returns and are best suited for short-term trading.
- UGL and DGP offer 2× daily long leverage—they gain when gold rises.
- GLL and DZZ offer 2× daily short leverage—they gain when gold falls.
- Futures-Based Strategy: These ETFs invest in gold futures contracts to achieve their leveraged positions.
Key Takeaways
The 4 Leveraged Gold ETFs: High Risk, High Reward
Gold investors seeking amplified returns have four U.S.-listed leveraged ETFs to choose from two long and two inverse each offering 2× daily leverage on the commodity gold (not mining stocks). These funds use futures contracts and derivatives to magnify daily price movements, making them suitable only for short-term, sophisticated traders.
2× Long Leverage:
- UGL (ProShares Ultra Gold)
- DGP (DB Gold Double Long ETN)
2× Short Leverage:
- GLL (ProShares UltraShort Gold)
- DZZ (DB Gold Double Short ETN)
Notable Risks:
- Daily reset mechanics can distort long-term returns.
- Low liquidity in DGP and DZZ increases trading costs.
- Fund websites inactive, adding transparency concerns.
- No active 3× gold ETFs—UGLD and DGLD were delisted in July 2020.
These instruments are not for beginners and should be used with caution. Investors looking for long-term gold exposure may prefer traditional ETFs or physical gold holdings.
As of October 20, 2025, gold prices have climbed above $4,300 per ounce, marking the highest level in history. The surge reflects heightened investor demand for safe-haven assets amid global economic uncertainty and inflationary pressures.
This milestone adds momentum to gold-focused investment vehicles, including traditional and leveraged ETFs, and underscores gold’s enduring role as a store of value.
Leveraged Gold ETFs: Strategy, Structure, and Liquidity
Leveraged gold ETFs offer amplified exposure to gold price movements but are not designed for long-term investing. These funds reset daily, meaning their performance compounds over short timeframes and may diverge from gold’s actual trajectory over weeks or months.
The following ETFs provide 2× daily leverage on the commodity gold not gold mining stocks and are ranked by average daily trading volume.
Daily Sensitivity: Leveraged ETFs respond to daily price movements, which means gains and losses are amplified.
Not for Long-Term Holding: These funds are designed to deliver 2× or 3× returns on a single day’s performance, but do not compound predictably over longer periods.
Example: A 2× ETF may return 2% on a day when its benchmark rises 1%, but it won’t necessarily return 20% in a year when the benchmark rises 10%.
Volatility Risk: In choppy markets, compounding effects can erode returns, even if the underlying asset trends upward.
ETF Spotlight: ProShares Ultra Gold (UGL)
UGL offers 2× daily long leverage on the Bloomberg Gold Subindex, making it a high-risk, high-reward option for bullish gold traders. Structured as a commodity pool, the fund uses futures contracts to amplify daily gold price movements.
Investor Advisory
- Daily Reset Risk: Returns are based on daily performance, not long-term trends.
- Volatility Warning: Gains can be large, but losses can compound quickly in choppy markets.
- Active Monitoring Required: Not suitable for passive or long-term investors.
Daily Inversion Only: Inverse ETFs are designed to deliver the opposite of their benchmark’s one-day return, not long-term inverse performance.
Not for Long-Term Holding:
Example: An inverse ETF may return +1% on a day when its benchmark falls -1%, but it won’t necessarily return +10% over a year if the benchmark falls -10%.
Volatility Risk: Like leveraged ETFs, inverse ETFs are highly sensitive to daily market swings, and compounding effects can distort returns over time.
ETF Spotlight: DB Gold Double Long ETN (DGP)
DGP offers 2× daily long leverage to the Deutsche Bank Liquid Commodity Index Optimum Yield Gold, making it a high-octane tool for traders with a short-term bullish outlook on gold. Structured as an exchange-traded note (ETN), it behaves like a stock but is technically an unsecured debt instrument meaning it carries issuer credit risk and does not pay interest.
Investor Advisory
- Daily Reset Risk: Returns are compounded daily, not linearly over time.
- Low Liquidity: With relatively low trading volume, bid-ask spreads may be wide.
- Issuer Risk: As an ETN, DGP is unsecured debt—investors are exposed to Deutsche Bank’s creditworthiness.
- Not for Long-Term Holding: Best suited for active traders, not passive investors.
Liquidity Concerns: ETFs with less than $50 million in assets under management (AUM) often suffer from low trading volume, leading to wider bid-ask spreads.
Higher Trading Costs: Poor liquidity can result in slippage and elevated transaction costs, which may erode investment gains or amplify losses.
Investor Tip: Always check AUM and average daily volume before trading especially with niche or leveraged ETFs.
TF Spotlight: ProShares UltraShort Gold (GLL)
GLL delivers -2× daily inverse exposure to the Bloomberg Gold Subindex, making it a tactical tool for traders betting against gold. Structured as a commodity pool, the fund uses futures contracts to amplify downside moves in gold prices.
Investor Advisory
- Inverse Leverage Risk: GLL seeks -2× daily returns, not long-term inverse performance.
- Daily Reset Mechanics: Returns compound daily, which can distort longer-term results.
- Volatility Warning: Losses can amplify quickly in rising gold markets.
- Sophisticated Use Only: Not suitable for passive investors or those with low risk tolerance.
ETF Spotlight: DB Gold Double Short ETN (DZZ)
DZZ offers 2× daily inverse exposure to the Deutsche Bank Liquid Commodity Index Optimum Yield Gold, making it a tactical tool for traders with a short-term bearish outlook on gold. Structured as an exchange-traded note (ETN), DZZ behaves like a stock but is technically unsecured debt, exposing investors to issuer credit risk.
Investor Advisory
- Inverse Leverage Risk: Designed for -2× daily returns, not long-term inverse tracking.
- Extremely Low Liquidity: With very low AUM and trading volume, DZZ may be difficult to buy or sell efficiently.
- Higher Risk Profile: Even riskier than GLL due to illiquidity and issuer exposure.
- Short-Term Use Only: Not suitable for long-term portfolios or passive investors.
