Gold has long held a special place in the investment world. I believe it's tangible, time-tested, and often viewed as a safe haven during economic uncertainty. But is now the time to add gold to your portfolio? In this article, I’ll discuss why investors turn to gold, the current economic backdrop, and how you can invest in gold.
Why Investors Turn to Gold
Gold tends to shine in times of inflation, geopolitical tension, and market volatility. It doesn’t rely on corporate earnings or interest rates and has historically held its value during economic downturns. That’s why it often plays a role in diversified portfolios. It’s often used as an inflation hedge, a store of value, or simply as a form of insurance.
Current Economic Backdrop (Mid-2025)
As of today:
- Inflation remains sticky in many parts of the world, including the U.S.
- There is increased fear of the growing US debt and how it may impact the dollar.
- Central banks are maintaining elevated interest rates, though there’s pressure to cut.
- Geopolitical risks are keeping uncertainty high.
- Gold has performed well over the past 12 months, supported by strong central bank buying and investor demand.
All these factors have kept gold prices near historically high levels.
So, Should You Buy Now?
The answer depends on your goals.
- Looking for short-term gains? Gold may already be somewhat priced for perfection. If you’re chasing a quick return, tread carefully.
- Seeking portfolio protection? Gold may make sense as part of a broader risk management strategy.
- Building a long-term, diversified portfolio? A small allocation to gold can help balance equity and bond risk along with benefits of additional portfolio diversification.
Timing any investment perfectly is nearly impossible. But if gold aligns with your long-term strategy and risk profile, current conditions may still support a thoughtful, measured allocation.
How to Invest in Gold
You don’t need to store bars in your basement. Common ways to gain exposure include:
- ETFs
- Gold mining stocks or mutual funds
- Physical coins and bullion (though storage, insurance, and front-end/back-end commissions can add cost)
- Gold-backed IRAs (for retirement-focused investors)
Each method has different risk, liquidity, and tax implications. Make sure you understand what fits best within your plan.
Conclusion
In my opinion, gold shouldn’t be your whole strategy, but it can be a useful holding in a portfolio. Whether it’s a good time to invest depends more on your individual plan for the money than on market headlines. If you have questions about gold and whether it can fit into your portfolio, I’d be happy to chat.
Read more articles by Ryan Johnson