By Stephen W. Bedikian, AIF®, Associate Wealth Advisor
The strong returns of the Magnificent 7 stocks garnered a great deal of investors’ attention and attracted huge investment inflows in 2023 and 2024. But as their performance has begun to falter this year, investors may consider turning to one of the oldest of investments – gold. The price of gold ended 2023 at about $2,000 per ounce and has taken off since. Its price rose about 26% in 2024 and by another quarter so far in 2025, almost equaling its rise in full-year 2024.
What’s the current spot price of gold?
Gold hit a record in mid-March, closing above $3,000 for the first time; the spot price was trading over $3,300 in early May. Analysts are moving their price targets up, as they speculate on whether the price will hit $4,000 this year. For those of you who are wondering: Will gold prices go down? – you’ll find a vocal naysayer in John Paulson. He’s the hedge fund trader who personally made more than $4 billion betting against the housing market during the Great Recession. Paulson has said he expects gold to reach $5,000 by 2028.
Unlike metals such as copper or silver, industrial uses for gold account for less than 10% of demand. It’s used primarily for jewelry and investment purposes, so fair value is difficult to determine. Often the current price of gold is compared to historical ratios relative to other precious metals like silver or to financial market valuations. For most investors, gold can be seen as simply a store of value when confidence in their local currency diminishes. It may offer a ballast for a portfolio when the investing seas get rough.
Who is buying gold – and how much?
In the U.S., interest in gold seems to be related to investor age. A study by State Street Global Advisors – the sponsor of one of the biggest gold bullion ETFs – found that more than 60% of millennials now include gold in their portfolios. That’s far higher than 35% for Gen X and 20% for boomers. Allocations also vary, with gold weighing in at an average portfolio allocation of 29% for millennials, versus 13% for Gen X and 10% for boomers.
Global investment demand for gold increased by 170% year-on-year according to the World Gold Council, with retail investment in Chinese gold ETFs accounting for 10% of world demand. As trade tensions with the U.S. have grown, Chinese ETF investors bought $2.3 billion of shares during the first quarter of 2025, with total Chinese gold ETF assets reaching $14 billion and rapidly rising. Outside of the U.S., central banks have been large gold buyers as they diversify their reserves away from the U.S. dollar. Their purchases accounted for about 20% of total gold purchases during the first quarter of 2025.
What’s the best way to invest in gold?
There are several ways to make an investment in gold: buying and holding physical gold, investing in a gold bullion ETF, or investing in an ETF that invests in the stocks of publicly traded gold miners. For those willing to take on the risk, gold options and futures are also available.
- Physical Gold. There are lots of places to buy physical gold, including your local jeweler, Walmart, Costco (membership required) or the U.S. Mint. Of course, you will have to secure that gold. If you’re planning on using a safety deposit box at a bank, make sure you read the agreement that you’ll be required to sign. Often the agreement waives any responsibility by the bank for the contents of a safety deposit box – and it’s not insured by the FDIC. You’ll need to add a rider to your homeowners’ insurance policy for separate coverage.
- Gold Bullion ETFs. The easiest way to invest in gold is to buy shares in one of the gold bullion ETFs, which provide owners with a fractional, undivided ownership in a trust that holds gold bullion. The largest ETFs are the iShares Gold Trust (IAU) with $46 billion in assets, and SPDR Gold Shares (GLD), with over $100 billion in assets.
Currently, SPDR Gold Shares holds about 30.5 million ounces of gold. That’s a lot of gold. For reference, the U.S. Treasury holds about 261 million ounces of gold, most of it at Fort Knox in Kentucky. While there is no yield associated with gold, options can be bought or sold on ETF shares to generate income. For example, you could sell covered calls against your ETF shares to generate call premium income.
- Gold Mining Stocks or ETFs. The stocks of gold mining companies have tended to appreciate during the dramatic surge in gold prices, though proportionately less than the metal itself. Another aspect to consider is that mining costs generally rise with inflation.
Newmont Corporation, for example, is a gold miner that held gold reserves of about 96.1 million ounces at the end of 2022, when gold prices were about $1,800 per ounce. By 2024, Newmont’s reserves had grown to 134 million ounces when the spot gold price ended the year around $2,800/ounce. While the value of its reserves obviously increased substantially, the company’s fully loaded mining cost per ounce went from $1,211 in 2022 to $1,516 in 2024 – up over 25% for that two-year period. If the price of gold declines, Newmont’s profits could decline because of the growth it has experienced in its cost base.
- Gold Options and Futures. Investors looking to make a more short-term bet on gold could consider buying call options on the shares of one of the gold bullion ETFs. Alternatively, gold futures contracts offer a highly leveraged bet on the metal, typically requiring just a 5-10% margin on the notional value of the contract. Keep in mind that if the trade goes against you, you need sufficient liquidity to handle daily margin calls associated with futures contracts. Additionally, options and futures carry their own unique risks in addition to traditional investments and may not be suitable for your circumstances.
Investing in Other Precious Metals
While gold is the largest component of the precious metals group, investors can also invest in other metals such as silver, platinum and palladium. You can do this via a single-metal ETF like the iShares Silver Trust (SLV), or through an ETF that holds a basket of metals like abrdn Physical Precious Metals Basket Shares ETF (GLTR). The iShares Silver Trust share price increased 21% in 2024 and was up another 11% through early May in 2025.
Is gold a good investment for me?
If you’re considering an investment in gold, just remember the importance of holding a diversified portfolio of assets to help weather the inevitable storms. Allocations to gold should be considered in the light of your entire portfolio holdings and your personal financial objectives. Talk with your HH financial advisor if you’re considering an allocation to gold.
Disclosure:
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant.
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