Gold is on a record run — here’s how to invest, according to experts
News Summary
Gold prices have continued to reach fresh record highs in 2025, driven by increasing economic uncertainty and rising expectations for a Federal Reserve rate cut. As of September 4, spot gold was near $3,600 an ounce, having gained approximately 35% year-to-date. Experts generally view gold as a safe-haven asset that performs well during periods of low interest rates and political and financial uncertainty. Ongoing gold purchases by global central banks and heightened geopolitical strife are expected to further support demand for precious metals. Regarding investment methods, most experts recommend gaining exposure to gold through exchange-traded funds (ETTs) that track the price of physical gold, rather than buying physical bullion or gold mining stocks. SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) are noted as the two largest gold ETFs, praised for their liquidity, tax efficiency, and low cost. Despite gold's strong performance, financial advisors typically recommend limiting gold exposure to less than 3% of an overall portfolio, citing the temperamental nature and price commodity status of such trendy investments.
Background
Gold has historically served as a safe-haven asset, with demand typically rising as investors seek to hedge against inflation, currency devaluation, and geopolitical risks. Throughout 2025, the global economy has faced challenges including persistent inflationary pressures, uncertainty regarding major central banks' monetary policy paths, and escalating geopolitical tensions in various regions. The Federal Reserve's interest rate policy significantly influences gold prices. Market expectations for Fed rate cuts typically reduce the opportunity cost of holding non-yielding gold, thereby boosting its appeal. Concurrently, amid heightened global economic and political uncertainty, central banks worldwide have been consistently increasing their gold reserves to diversify assets and reduce reliance on the U.S. dollar.
In-Depth AI Insights
1. Does gold's sustained rally signify deeper systemic risks beyond mere rate cut expectations? While bets on Federal Reserve rate cuts are undoubtedly a catalyst for gold's ascent, its 35% year-to-date gain, particularly amidst the uncertain economic outlook of 2025, may reflect more profound underlying concerns: - Geopolitical Risk Premium: Persistent global conflicts and regional tensions are driving investors and central banks to view gold as the ultimate sovereign risk-free asset. - Erosion of Fiat Currency Trust: Ongoing inflationary pressures and unprecedented monetary expansion by central banks may be leading some investors to question the long-term purchasing power of major fiat currencies. - Structural Shift in Central Bank Gold Purchases: Central banks are accumulating gold at historic rates, which is more than mere diversification; it could be a strategic positioning for potential future shifts in the international monetary system. 2. How might gold's role as a portfolio safeguard evolve under the Trump administration? With Donald Trump re-elected as US President, his