Should I Buy Gold? How To Decide In 2026

Gold is in a bull market and up over 80% in the past year, so asking “should I buy gold?” is a fair question. For most long-term investors, the answer is yes, in a measured amount. 

Many portfolios hold stocks, bonds, mutual funds, and annuities, but no physical gold at all. 

This guide walks you through the case for gold, the drawbacks, how much to own, and what to watch before you buy.

So, should you buy gold?

Yes, for most long-term investors. A position in gold or other precious metals gives you wealth protection without letting one asset dominate your holdings. 

Gold moves differently from stocks and bonds, so it holds value when they fall. It pays no income, so you’ll want to size it as a hedge, not a growth engine. 

Buying physical gold

Gold has traded near record levels after setting a string of highs, yet it remains one of the most under-owned assets.

The World Gold Council reports that US gold demand rose 140% year over year to 679 tonnes in 2025. It also finds that gold stays under-allocated in most portfolios. So the recent rally has not pulled ordinary investors in the way you might expect.

Gold’s breakthrough

Gold just delivered its best year since 1979. The World Gold Council reports gold set 53 all-time highs in 2025 and reached a record annual average price of $3,431 per ounce, up 44% year over year. It broke through the psychological $4,000 barrier in October. 

This isn’t a short-lived rally. Gold’s climb comes from several changes in the global economy. And, there aren’t hype cycles like the ones you see with tech stocks. So, while the stock market has big dips, gold has proven to be one of the safest physical assets you can own.

What’s driving gold prices

Gold is trading near record levels after a pullback, and most major banks forecast further gains in 2026. Several factors are driving this.

Central bank buying

Central banks are buying gold at record levels. Through November 2025, they purchased 297 tonnes, with Poland and Brazil buying heavily. And 95% of central bankers expect global gold reserves to increase over the next 12 months. 

They’re buying about 566 tonnes per quarter. The banks are moving away from dollar-heavy reserves and into precious metals.

Economic uncertainty and geopolitical instability

Trade tensions and geopolitical conflicts keep markets on edge. Recent safe haven demand jumped after U.S. military strikes in Venezuela. Some analysts even talk about a potential global financial system reset, with gold playing a key role. 

When uncertainty rises, investors move to safety. Gold has filled that role for thousands of years.

Currency devaluation concerns

The Dollar Index dropped 10.7% in the first half of 2025, the steepest first-half decline in more than 50 years.  As the dollar weakens, investors are turning to gold to protect their wealth. Unlike paper currencies that governments can print at will, gold holds its value independently. That gap widens as currency devaluation speeds up globally.

Inflation and interest rates

The Federal Reserve has held its benchmark rate in a 3.5% to 3.75% range through mid-2026. This is due to inflation rising in recent months because of higher energy and commodity prices tied to a geopolitical conflict. Some Fed officials favor modestly higher rates, and policy is not currently seen as restraining the economy. The current direction is hold to hawkish, not cutting.

That’s a headwind for gold. Higher for longer rates raise the appeal of yield-bearing assets like bonds and savings accounts, and gold pays no income. But elevated inflation and geopolitical risk still support gold as a hedge. So these current events cut both ways, and you should weigh both sides before you buy.

Gold as a safety net

Gold protects your wealth in more than one way.

Safe haven investment

When markets crash, you need stability. That’s what gold provides. Unlike stocks or bonds, gold’s value doesn’t depend on any company or government. It stands on its own. 

Consider gold’s track record during recent major crises: 

• During the 2008 financial crisis, stocks crashed, but gold held steady and then rallied. 
• In early 2020, stocks dropped during COVID-19, but gold surged.

How does gold compare to stocks?

Gold has beaten the S&P 500 in 23 of the 53 years since 1971. The bigger difference shows up in bad years for stocks. 

When the S&P 500 finished a year in the red, gold averaged a 19.4% gain while the index averaged a 15.3% loss. So gold has tended to rise exactly when your stock holdings fall, which is why it works as a counterweight rather than a replacement.

Inflation hedge

When inflation rises, your dollars buy less. But an ounce of gold from that same year has kept pace. Two forces make gold’s hedge more useful today. 

1. Global debt has hit $340 trillion, and when governments are this indebted, they’re tempted to inflate away the debt. 
2. Bonds and cash accounts often deliver negative returns after inflation. 

Gold acts as your inflation hedge, preserving the real value of your savings. Looking ahead, most major banks forecast further gains in 2026.

What gold buyers choose in 2025

Swiss America’s own 2025 sales data shows how real buyers position themselves. 97.6% of buyers chose coins over bars. Gold IRAs made up 21% of all sales, which points to how many people use physical metals for retirement. 

The most common purchase size is in the 0.5 to 1 oz range at 39.5%. So most buyers start with divisible coins in smaller sizes rather than large bars.

Gold investment options explained

There are a few different ways you can invest in gold.

Physical gold vs paper gold

You can own the physical metal or a paper claim to it. Here are the differences between physical gold bars or coins vs exchange-traded funds (ETFs):

Feature	Physical gold	Paper gold (ETFs)
Ownership	Tangible asset you own	Shares in a fund, no physical delivery
Liquidity	Lower, requires dealers, purity assessments	High, trade instantly on exchanges
Storage costs	Physical storage, insurance costs	No storage, annual fees 0.25-0.40%
Counterparty risk	Zero	Fund failure risk exists
Crisis protection	Full protection, independent of financial system	Depends on fund stability

Physical gold gives you absolute ownership with no counterparty risk. In a financial crisis where banks fail, physical gold provides protection that paper assets can’t match. 

It does come with tradeoffs. You need secure storage at home or in a bank safety deposit box. Dealers have to assess purity, and you rarely get the full spot price when selling. Buying and selling involve higher costs than ETFs.

Gold ETFs offer convenience and liquidity. Annual fees run 0.25-0.40%. ETFs are backed by standardized 99.5% pure gold held in audited vaults. The tradeoffs are that you’re trusting custodians and financial institutions. If the system faces severe stress, paper gold may not provide the same protection as physical metal. 

For most investors, a balanced approach gains exposure to gold. Core holdings in physical gold can provide stability against inflation concerns or economic instability.

Other ways to invest in gold

Gold mining stocks: Mining stocks can benefit from rising gold prices. Risks include management decisions, rising energy costs, labor issues, and mine problems. When gold drops, mining stocks fall harder. 

Precious metals mix: You can combine gold with silver for diversification. A 60:40 gold-silver split balances stability with growth. 

Gold IRAs: This approach involves owning physical metals in tax-advantaged retirement accounts.

Critical factors before you buy

Timing and market conditions

Gold is trading near record levels after pulling back from its highs. Are you buying at the peak? Maybe. But most major banks forecast further gains in 2026, even with volatility along the way. Here’s what those institutions are forecasting:

Institution	2026 gold price forecast
HSBC	High of $5,050 in H1 2026, year-end $4,450
J.P. Morgan	Q4 2026 average $6,000, rising toward $6,300 by end of 2027
Goldman Sachs	Approximately $4,900 by year-end
Expert consensus	$5,000 target

If you’re not sure if now is the time to buy gold, you can use dollar-cost averaging to buy gradually over several months.

Assessing your risk tolerance and investment objectives

Before you buy gold, make sure it fits your financial situation and goals. 

Allocation: What percentage of your portfolio can you put into alternative investments? If you’re heavily weighted in stocks or real estate, you have more room for gold. 

Protection: Are you looking for wealth protection or investment returns? Gold protects wealth but doesn’t generate income like dividend stocks or bonds. 

Timeframe: What’s your timeline? Gold rewards patience. Gold is a “set it and forget it” asset that has delivered a 9.1% compound annual growth rate over 25 years without active management.

Gold investment pros and cons

Pros

• Wealth preservation: Gold holds value across generations and through currency devaluation.
• Institutional demand: Central banks bought 297 tonnes through November 2025, and 95% of central bankers expect reserves to rise.

Cons

• No income: Gold doesn’t pay dividends or interest.
• Storage costs: Physical gold needs secure storage and insurance.
• Price volatility: Gold experiences short-term fluctuations, which can be around 19% annualized.
• Liquidity constraints: Selling physical gold is not as quick as selling paper assets.

Gold allocation strategy

How much should you own? It depends on your risk tolerance and goals. Here’s a framework you can use:

Risk profile	Recommended gold allocation	Primary investment vehicles	Rebalancing strategy
Conservative	5-10%	100% physical gold	Add on 10-15% price dips
Balanced	10-15%	80-90% physical gold, 10-20% miners	Rebalance if gold exceeds the target by 10%
Aggressive	15-20%	60-70% physical gold, 30-40% miners with strong cash flows	Rotate from overweight growth/tech

These allocations assume a diversified portfolio. Gold should complement your holdings, not dominate them. 

Final thoughts on gold investing

Gold and other physical precious metals can help bring stability to your portfolio and offset risks. To learn more about investing in gold coins or bars, connect with the Swiss America team today!

Should I buy gold? FAQs

What if I invested $1000 in gold 10 years ago?

You would have roughly tripled your money. Gold has delivered a 334% gain over recent decades and about a 9% to 10% annual return over the long run. 

A $1,000 position from ten years ago would be worth several thousand dollars today. The exact figure depends on your entry and exit points. Gold rewards patience more than timing.

How much will $10,000 buy in gold?

It depends on the live price. At the current price of ... per ounce, $10,000 buys a few ounces plus fractional coins. Divide $10,000 by that live price to see the exact amount. 

Many buyers split a sum like this across smaller coins in the 0.5 to 1 oz range for easier resale. Coins give you more flexibility than a single large bar.

What will gold be worth in 5 years?

Higher, if current forecasts hold. Most major banks expect further gains through 2026, driven by central bank buying, a weaker dollar, and ongoing geopolitical risk. Longer forecasts extend the trend upward but carry more uncertainty, since rate policy and inflation can shift the path. 

No forecast is a promise, so treat these as targets, not certainties.

What does Warren Buffett think of gold?

Skeptical, historically. Warren Buffett has long argued against gold because it produces no income or dividends, unlike a business or a bond. That view judges gold as a growth engine rather than a hedge. 

Gold’s role is wealth protection during downturns and currency devaluation, which is a different job than generating yield.

What is the 20-year return of gold?

Strong. Over the past 25 years, gold has delivered roughly a 9% to 10% compound annual return and about a 17-fold increase in price. That pace outran inflation and cash over the same span. Returns vary year to year, so the long-term average tells you more than any single year.

The information in this post is for informational purposes only and should not be considered tax or legal advice. Please consult with your own tax professionals before making any decisions or taking action based on this information.