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Global MarketsJuly 19, 2026 at 05:28 AM

The Hidden Danger in Leveraged Gold ETFs: UGL and GLL Could Lose 90% of Value Over Decades

724FinanceBora Yalın

The Hidden Danger in Leveraged Gold ETFs: UGL and GLL Could Lose 90% of Value Over Decades

2026 proved to be a turning point for leveraged gold ETFs, exposing their biggest risk. ProShares Ultra Gold (UGL) and UltraShort Gold (GLL) failed to deliver expected returns due to their daily reset mechanism.

■UGL lost 23% despite gold dropping 8%, while GLL gained only 5%.

■This is known as 'daily reset decay'.

■Over 12 months, UGL gained only 21% while gold rose 18%.

■GLL lost 37% despite gold falling 37%.

■Over a decade, GLL lost 90% of its value.

■GLD and IAU, without daily resets, offer more stable performance. Experts recommend these for gold exposure.

Markets may force a rethink on leveraged ETFs. Rising use of these funds could increase liquidity crisis risks. Investors may need to seek lower-risk alternatives for gold positions.