Investors have always utilized gold as a hedge for uncertainty—and if you’ve been anywhere near a TV or newspaper over the last month, we don’t have to tell you that we have enough chaos to last us a lifetime right now. Amid geopolitical upheaval in the Middle East, a full-on trade war simmering, and Russia’s war with Ukraine showing no signs of ending, a world on fire has boosted the glittering metal to new heights.
Gold climbed roughly 26% in 2024—handily outpacing the broader stock market in its best year since 2010. The shiny metal jumped another 9.42% in just the past month alone, continuing its record-breaking winning streak.
Regular old retail investors aren’t the only ones scrambling for a hedge: Central banks worldwide have been splashing out on the precious metal like it's on supersale at Costco.
According to recent data from the World Gold Council released this week, central banks ramped up their gold purchasing to 1,045 metric tons in 2024—double the average amount they purchased in the ten-year period between 2011 and 2021. China, Poland, Turkey and India are some of the largest buyers.
The Street is bullish on gold
Analysts at major banks including JPMorgan, Citigroup, and Goldman Sachs set their price targets for gold at $3,000 per ounce for this year back in December—almost 4% above its current price of $2,886 an ounce.
Thanks to a hot start in 2025, the bulls are growing in numbers. Just yesterday, UBS Americas CIO Solita Marcelli said the bank had raised its price target from $2,870 per ounce to $3,000.
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“We think diversification and de-dollarization trends should lead to continued solid central bank demand in the coming years,” Marcelli wrote. “Moreover, an increasing US federal deficit and the worsening of its debt profile over the long run should also underpin gold’s attractiveness versus the US dollar.”
Don’t want to lug bars back from Costco?
Exchange-traded funds can give you direct exposure to gold—and other commodities—without actually owning it physically. The largest pure-play gold ETF on the market is the SPDR Gold Shares (GLD). The fund gained 27% in 2024 and is currently up 7.53% year to date.
Gold miner stocks such as Barrick Gold and Newmont Corp can also provide a different way to play this golden theme. While their performance has lagged the actual commodity since 2021, since these firms are obviously very involved in gold production, they tend to rise when there’s more demand for the metal.
However you choose to invest, this precious metal can provide much-needed safety from market volatility: “We continue to see gold as an effective portfolio hedge and diversifier, and believe an allocation of around 5% within a USD balanced portfolio is optimal. Direct exposure to the metal may dampen risk in portfolios,” wrote Marcelli.
Talk about a new golden age.—LB