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Gold has surged about 12% in the past month and is close to its highest level in six years now, thanks mainly to investors’ search for safer assets amid rising market uncertainty and geopolitical tensions.

Rising hopes for a rate cut by the Fed also boosted the appeal of gold as lower interest rates reduce the opportunity cost of owning gold. A weaker dollar makes gold prices attractive to consumers in emerging markets like India and China, which are the world’s top gold consumers.

Gold purchases by central banks have soared in recent years and this trend is expected to continue. During the first quarter, gold purchases by global central banks, led by Russia and China, were the highest in six years, according to the World Gold Council.

I believe that gold should be a small part of any investment portfolio, mainly due to its low correlation with other asset classes.

Physically backed gold ETFs provide low-cost, convenient exposure to the metal. Investors should look at the expense ratio, trading costs and gold per share when selecting a gold ETF for their portfolio.  

The SPDR Gold Trust (GLD - Free Report) is the largest and most liquid gold ETF. Each share of this ETF represents about 1/10th of an ounce of gold. It has an expense ratio of 0.40%.  

Last year, State Street launched a cheaper version of GLD—the SPDR Gold MiniShares Trust (GLDM - Free Report) —which has an expense ratio of 0.18%.  

The iShares Gold Trust (IAU - Free Report), the second largest gold ETF, comes with an expense ratio of 25 basis points. The GraniteShares Gold Trust (BAR - Free Report) is one of the cheapest gold ETFs, with an expense ratio of 0.1749%.  Each share of IAU, BAR, and GLDM represents 1/100th of an ounce of gold.