Gold prices have surged over 40% since late 2023, now approaching $3,200 per ounce.
This increase stems not from jewelry or industrial demand but from gold’s role as a financial safe haven during uncertain times.
Though gold pays no interest like bonds or dividends like stocks, it serves as protection against inflation and economic instability.
Gold-backed ETFs have made it easier for investors to add gold to their portfolios. The metal demonstrated its value during COVID-19 when prices jumped 22% in six months despite low inflation.
Central banks have also increased gold purchases following sanctions on Russia, as many seek alternatives to dollar assets.
Investors must balance gold’s protective benefits against the opportunity cost of not holding interest-bearing securities.