Gold is at a fresh record high. Does it still make sense to buy?

Yahoo

13-04-2025

Gold's performance has been impressive, to say the least, against a backdrop of changing U.S. tariff policies and a plunge in global stock markets.
And while some worry about its climb to record highs, it may still be a good time to buy the precious metal.
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It's not too late to profit from gold, said Jan Skoyles, U.K.-based head of marketing at precious-metals dealer GoldCore, in a video posted on YouTube Thursday. 'Not by a long shot — you're right on time,' she said.
Gold's price climb, however, may suggest to some that it's too late catch the rally.
Gold futures settled at their highest level on record Friday, with the most active, June contract GC00 GCM25 at $3,244.60 an ounce, up $67.10, or 2.1%. Despite a loss for the week ended April 4, prices are trading over 20% higher year to date. They've notched record-high settlements a total of 21 times so far in 2025, according to a Dow Jones Market Data analysis of FactSet data.
Gold has broken through $3,000 an ounce, but that number 'isn't a finish line — it's a flare, a signal, an announcement that something much bigger is happening underneath the surface,' Skoyles said. 'Because when gold is surging, it doesn't mean that the economy is booming — it means the opposite. It means things are breaking or have already broken.'
Gold rises when 'trust folds, when systems wobble, when people start asking whether the people in charge are really, truly in charge,' she said. 'So if you're sitting on the sidelines wondering if the ship has sailed, well, here's the simple truth: The ship hasn't even finished boarding.'
The yellow metal has shown resilience, even as some investors sold gold to generate liquidity as the stock market plunged following President Donald Trump's 'liberation day' tariffs announcement on April 2. The president then announced this past Wednesday that he was pausing the planned tariff hikes for 90 days, but further raised tariffs on China.
'Gold typically is a source of liquidity in initial market selloffs, with mild price declines, after which it typically stabilizes as a haven from volatility in risk assets,' said Robert Minter, director of ETF investment strategy at Aberdeen Investments. It appears that pattern has occurred again, with gold selling off less than 5% and now at a new all-time high, he noted.
Trump's trade-policy changes are reminding investors that gold is 'the only currency that is not someone else's debt,' said Minter. All currencies, other than gold, are backed by the 'faith and credit of the issuing nation,' subject to the stability of governments and their policies.
In the U.S., government policy has seen big shifts since Trump took office in January.
'We've got an administration that isn't acting in the way the market expects it to, and traditional expectations for markets are deteriorating,' said Dina Ting, head of global index portfolio management at Franklin Templeton. 'Given Trump's tariff policy continues to puzzle investors, we believe central banks should continue to store gold as they shift reserves away from [U.S.] dollars.'
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Gold imports, meanwhile, are exempt from Trump's tariff plans.
That reflects the metal's 'unique status as a monetary metal critical to financial markets and central-bank reserves,' said Michael Meechan, director of investments at Hollow Brook Wealth Management. 'This exemption may help stabilize the precious metal despite broader trade disruptions.'
He said the Trump tariffs 'did not change the way investors view gold; they reinforced it.' Gold has 'long been seen as a store of value in times of uncertainty, and the administration's tariff-centric policy approach, coupled with the accompanying volatility seen in both the bond and stock markets, has only further strengthened that perception.'
Keep mind, however, that gold shouldn't be part of a get-rich-quick scheme.
'Gold won't make you rich overnight, but it might stop you [from] becoming poor over time,' said GoldCore's Skoyles.
'Gold is not a bet. It's a ballast,' Skoyles said. 'You don't hold gold to chase returns. You hold gold so your other assets don't drag your entire future into a ditch when the music stops.'
With that mind, diversification may be key for investors.
Asset-management company DWS suggests that investors to keep a 'diversified portfolio' that includes 5% to 10% exposure to alternatives, depending on risk preference, said Darwei Kung, portfolio manager of commodities at DWS. Alternative investments are those outside of traditional categories such as stocks and bonds.
Exchange-traded funds are a 'relatively cost-efficient way' to gain physical gold exposure without having to deal with storage issues, he said. The gold-backed SPDR Gold Shares ETF GLD is trading 23% higher year to date.
Gold has held up very well during challenging equity-market conditions, Kung added. With inflation poised to rise from the impact of broad-based tariffs, 'we expect gold to continue to shine as a diversifier for everyone's investment portfolio.'
Meanwhile, the speed of gold's move is significant and shows 'this isn't just a rally — this is a rupture,' said Skoyles.
She provided previous examples of when gold broke through a milestone price, such as $2,000 an ounce during the COVID pandemic. 'Each time, it wasn't a celebration; it was a symptom. It was a warning light flashing on the global dashboard,' she said.
Gold jumped from $2,500 to $3,000 in just 210 days, Skoyles noted, adding that it normally takes years for it to move that much. Previous $500 jumps took over 1,700 days on average, she said.
While many people hear $3,000 an ounce and think they've missed their opportunity in gold, that's 'like refusing to get on the motorway just because the traffic's moving,' Skoyles said. 'If anything, the need to get there is more urgent than ever.
'People are realizing that gold isn't for the end of the world,' she added. 'It's for the world we're in.'
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