Gold is in a bull market run and up over 80% in the past year. Yet many investors don’t own any physical gold. Their portfolios hold stocks, bonds, mutual funds, and annuities, but no gold. So, if you’re wondering “should I buy gold?”, this article can help you decide.
Buying physical gold
As of this writing, gold and silver prices are at all-time highs. In 2025 alone, gold gained 65% and set over 50 all-time highs. Despite this performance, gold remains one of the most under-owned assets.
Gold’s breakthrough
Gold just delivered its best year since 1979, forcing even the most dedicated stock enthusiasts to pay attention. The metal surged 65% in 2025, breaking through the psychological $4,000 barrier in October before climbing to its current record level above $4,900.
This isn’t a flash-in-the-pan rally. Gold’s climb is due to several changes in the global economy. What makes the gold market’s performance interesting is how it happens. There are no flashy headlines or hype cycles as you see with tech stocks. Gold just steadily delivers returns.
And 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 heading toward $5,000 in 2026. J.P. Morgan and HSBC predict prices above $5,050 this year. 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. This consistent institutional demand supports gold prices. And 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, showing how quickly geopolitical risks can escalate. Some analysts even talk about a potential global financial system reset, with gold playing a key role as it has during past monetary changes.
When uncertainty rises, investors move to safety. Gold has filled that role for thousands of years.
Currency devaluation concerns
The U.S. dollar dropped sharply in 2025. 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. This matters more as currency devaluation speeds up globally.
Low-interest-rate environment
Interest rates are relatively low by historical standards, and the Federal Reserve may decrease rates even more. This makes gold more attractive because you’re not giving up much interest income from bonds or savings accounts.
Economic data shows slower hiring and job growth. This means the Fed might keep rates low longer than expected, which supports higher gold prices.
Gold as a safety net
There’s three main ways that gold can protect your wealth:
1) 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, government, or economy. It stands on its own, which makes it a hedge when financial systems face stress.
Consider gold’s track record during major crises:
- 2008 financial crisis: When stocks crashed, gold held steady and then rallied.
- COVID-19: In early 2020, stocks dropped, but gold surged.
Gold has outperformed the S&P 500 in 23 of 53 years since 1971. When the stock market has down years, gold performs well. In those negative years, gold averaged gains of 19.4% while the S&P 500 averaged losses of 15.3%.
Gold isn’t meant to replace stocks in your portfolio. It’s insurance. The S&P 500 delivers strong gains in bull markets, but those gains come with dips. And the index includes plenty of underperforming stocks that drag down the average. When stocks fall, your gold holdings often hold steady or rise. This balances out your portfolio during turbulent times.
Inflation hedge
When inflation rises, your dollars buy less. A dollar from a few decades ago is worth pennies today. But an ounce of gold from that same year has kept pace and grown substantially. While paper money slowly loses value, gold bars or coins protect your purchasing power.
This matters more today because:
- Massive global debt: Global debt has hit $340 trillion, roughly three to four times global GDP.
- Inflation pressure: When governments are this indebted, they’re tempted to inflate away the debt.
- Negative real returns: 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, conservative forecasts put gold above $5,000 in 2026. HSBC predicts highs of $5,050 in the first half of 2026. J.P. Morgan sees prices potentially reaching $5,400 by the end of 2027. These forecasts reflect gold’s role as a diversifier against inflation and massive government debt.
Portfolio diversification
Building a resilient portfolio takes more than just stocks and bonds. You need diversification, and that’s where it makes sense to purchase gold. Gold moves differently from stocks and bonds. When stocks drop, gold often holds steady or rises. This is what makes it an effective hedge.
How much gold should you own?
Your allocation depends on your risk profile:
- Conservative (5-10%): Provides stability and protection during downturns without too much exposure to gold.
- Balanced (10-15%): Offers strong diversification while leaving room for other asset classes.
- Aggressive (15-20%): Good for those rotating out of overweighted growth or tech stock positions.
Gold does more than diversify. It preserves wealth, especially in retirement portfolios. As of late 2025, institutional investors held 2.8% of assets under management in gold. For long-term investors planning for retirement, gold’s stability and inflation protection become more valuable as you get closer to retirement.
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 possess | 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 and financial infrastructure |
Physical gold gives you absolute ownership with no counterparty risk. When you hold gold bullion bars or coins, no intermediary stands between you and your wealth. In a real financial crisis where banks fail, physical gold provides protection that paper assets can’t match.
Physical gold trade-offs:
- Security: You need secure storage at home or in a bank safety deposit box.
- Liquidity: Dealers have to assess purity, and you rarely get the full spot price when selling.
- Transaction costs: Buying and selling involve higher costs than ETFs.
Gold ETFs offer convenience and liquidity. You can buy or sell instantly during market hours. Annual fees run 0.25-0.40%. ETFs are backed by standardized 99.5% pure gold held in audited vaults.
ETF trade-offs:
- Counterparty risk: You’re trusting custodians, fund managers, and financial institutions.
- Crisis protection: If the system faces severe stress, paper gold may not provide the same protection as physical metal.
For most investors, a balanced approach is a good way to gain exposure to gold. Core holdings in physical gold can provide stability against inflation concerns or economic instability.
Other ways to invest in gold
Beyond physical gold and ETFs, there are other ways to get gold exposure:
- Gold mining stocks: Mining stocks can benefit from rising gold prices. However, 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
If you’re looking at adding gold to your portfolio, here are key things to consider.
Timing and market conditions
Gold just hit an all-time high of $5,073. So are you buying at the peak? Maybe. But most experts think prices will keep rising in 2026, even if there’s volatility along the way.
Here’s what major financial institutions are forecasting:
| Institution | 2026 gold price forecast |
|---|---|
| HSBC | High of $5,050 in H1 2026; year-end $4,450 |
| J.P. Morgan | Q4 average $5,055; rising toward $5,400 by end of 2027 |
| Goldman Sachs | Approximately $4,900 by year-end |
| Expert Consensus | $5,000 target |
HSBC, J.P. Morgan, and other institutions base these forecasts on central banks buying 566 tonnes quarterly, geopolitical risks, dollar weakness, and Fed rate cuts. Most experts agree on a $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. This lets you build your position at different price points and takes the pressure off trying to time the market perfectly.
Assessing your risk tolerance and investment objectives
Before you buy gold, make sure it fits your financial situation and goals. Ask yourself a few questions:
- 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. Short-term traders often struggle with gold’s volatility. Long-term investors benefit from its wealth preservation.
Gold is a “set it and forget it” asset that has delivered a 9.1% compound annual growth rate over 25 years without any active management. Compare that to stock portfolios that need constant reshuffling for tax optimization or performance reasons. That costs money and requires ongoing attention.
Gold investment pros and cons
Like all investments, there are pros and cons. Here’s what to know before you purchase gold:
Pros
Reasons why gold is a good bet:
- Proven safe haven asset: Gold has delivered a 17-fold increase over 25 years and gained 65% in 2025 alone. It set over 50 all-time highs in a single year. This shows sustained demand, not a speculative bubble.
- Inflation hedge: Gold protects your purchasing power when currencies lose value. It outperforms bonds and savings accounts during high inflation periods. This matters more as governments face pressure to inflate away their debt.
- Portfolio diversifier: Gold moves differently than stocks. When equities decline, gold often appreciates. This reduces overall portfolio volatility while maintaining growth potential.
- Wealth preservation across generations: Companies can fail. Currencies can collapse. Gold has maintained value for thousands of years. This makes the metal a multi-generational wealth transfer asset.
- Institutional buying: Central banks purchased 297 tonnes through November 2025. And the World Gold Council reports that 95% of central bankers expect global reserves to rise further. When the world’s most sophisticated financial institutions buy an asset aggressively, it makes sense to pay attention.
- Set it and forget it: Gold achieves growth without constant management, rebalancing, or trading. Equity portfolios need broker intervention for tax optimization and performance adjustments, which costs money. Gold just appreciates while you focus on other things.
Cons
Gold has benefits, but there are also some drawbacks:
- No income: Gold doesn’t pay dividends or interest. If you need income from your portfolio to cover living expenses, this is a limitation.
- Storage costs: Physical gold needs secure storage and insurance. These ongoing expenses add up over time.
- Price volatility: Gold experiences short-term fluctuations. Both gold and stocks show similar volatility around 19% annualized, but corrections can test your patience.
- Liquidity constraints: Selling physical gold is not as quick as selling paper assets.
Gold allocation strategy
How much yellow metal should you own? It depends on your risk tolerance and goals. Here’s a framework for early 2026:
| 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 target by 10% |
| Aggressive | 15-20% | 60-70% physical gold, 30-40% miners with strong cash flows | Rotate from overweighted growth/tech |
These allocations assume you have a diversified portfolio with stocks, bonds, and alternative investments. Gold should complement your holdings, not dominate them. Even aggressive allocations of 15-20% leave 80-85% of your portfolio in other assets.
- Dollar cost averaging: If you’re currently at 0% gold, don’t rush to your target allocation. Dollar-cost average over 3-6 months and take advantage of price dips. This builds your position while managing entry-point risk.
- Rebalance: If gold exceeds your target by 10% or more, trim the position and redirect proceeds to underweighted areas. If gold corrects 10-15%, add to your holdings at better prices. This forces you to buy low and sell high instead of making emotional decisions.
- Retirement: Wealth preservation becomes more important than aggressive growth in retirement. Gold protects your purchasing power across decades of retirement spending. Consider Gold IRAs to maximize tax efficiency.
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?
A $1000 investment in gold 10 years ago would be worth approximately $4,335 as of this writing, with current prices of $5,073/oz. That’s a 334% gain.
- Historical performance: Gold averaged 9-10% annual returns over the past two decades.
- Recent gains: Gold gained 65% in 2025 alone, with over 50 all-time highs.
- Long-term track record: Over 25 years, gold delivered a 17-fold increase compared to the S&P 500’s 5-fold gain.
How much will $10,000 buy in gold?
At current prices of $5,035/oz, $10,000 would buy approximately 2 ounces of gold. The exact amount depends on premiums and dealer pricing.
- Physical gold: You can buy gold coins or bars through reputable dealers like Swiss America.
- Dollar-cost averaging: Consider spreading your $10,000 purchase over 3-6 months with different-sized bars or coins to manage entry-point risk.
What will gold be worth in 5 years?
Predicting gold prices five years out is difficult, but current drivers point to continued strength. Most experts expect gold to keep rising as long as central banks keep buying, inflation persists, and geopolitical uncertainty remains.
- Central bank demand: If institutions continue buying 755-1,100 tonnes annually, this provides sustained support for higher prices.
- Inflation trends: Continued currency debasement and massive government debt suggest gold’s inflation-hedging role becomes more valuable.
- Geopolitical factors: Ongoing tensions and de-dollarization efforts could push gold higher over a five-year period.
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.
