Gold has been on a tear.
After a standout 2024 in which the precious metal gained 26%, gold prices have continued their upward trajectory this year, breaking above $3,500 for the first time yesterday. That represents nearly a 30% increase year-to-date — and close to a doubling in price since mid-2023.
This extraordinary rally has far outpaced the broader equity markets. Over the same period, the S&P 500 has risen by just 18%.
Related: Adding Gold to Your Portfolio to Hedge Against Inflation
What’s Fueling the Gold Rush?
Historically, gold has served as a safe haven asset — one that investors turn to during periods of uncertainty. The current surge appears to be driven by a combination of geopolitical instability, concerns about inflation, and a general search for financial safety in a volatile global economy.
It’s not just individual investors piling in. Foreign central banks have been major players in the gold market. China has increased its gold reserves significantly, with the metal now comprising about 6.5% of its total foreign exchange holdings. Other notable buyers include Poland, Turkey, and India.
Is There More Room to Run?
While gold pulled back slightly from its highs — falling just over 1% yesterday afternoon — many analysts remain optimistic. Some, like JPMorgan strategist Gregory Shearer, forecast that gold could reach $4,000 by the second quarter of 2026. Still, others caution that the rally may have outpaced fundamentals, suggesting the metal could be overvalued in the short term.
How to Invest in Gold
If you’re looking to gain exposure to gold, there are several options:
- Gold ETFs: Exchange-traded funds like the iShares Gold Trust (GLD) allow investors to track the price of gold directly. These funds are backed by physical gold and offer a simple way to add the metal to your portfolio without needing to store bullion.
- Gold Mining Stocks: Companies such as Barrick Gold and Newmont Corporation provide exposure to the gold sector. While these stocks can benefit from rising gold prices, they come with additional risks tied to the businesses themselves — and many have underperformed the metal in recent years.
- Physical Gold: Some investors prefer owning physical gold in the form of coins or bars. Though less liquid and potentially more cumbersome to manage, it offers a tangible store of value.
Gold’s recent performance highlights the metal’s role in a well-diversified portfolio — particularly during uncertain times. Whether the rally continues or experiences a pullback, gold remains an asset class worth watching closely.
As always, if you’re considering adding gold or any other alternative investment to your portfolio, it’s important to weigh your risk tolerance and long-term goals. If you’d like to discuss how gold might fit into your broader financial plan, feel free to reach out.
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Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.