The waiter held 1 km of gold bars on February 17, 2025.
Akos Stiller/Bloomberg by Getty Images
Gold prices are popping up. But investors should Avoid temptation Investment experts say in order to chase shiny objects.
SPDR Gold Stock Fund (gldAs of 2 p.m. ET Tuesday, 2025, the tracked price of gold bars is about 11%. Over the past year, the rate of return has risen by about 42%. (Price fell more than 1% on Tuesday.)
Gold Futures Price Compared to the same period last year, the year-to-date growth is about 10%, and it is currently 36%.
By comparison, S&P 500 The U.S. stock index grew by about 1.5% in 2025 and 17% in the past year.
Certified financial planner Lee Baker said he didn’t receive a call from a client a year ago. Now, he sends them regularly.
He thinks investors will remember wisely Classic Rules From Warren Buffett, “When others are greedy, be afraid, and when others are terrified.”
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“For me, it’s about gold and everyone is starting to become greedy,” said Atlanta-based Claris Financial Advisors and a member of CNBC. Advisory Board.
Baker said typical investors should not allocate gold more than 3% of their diversified portfolio.
Investors attracted by lofty returns may have a knee-despite reaction and buy a large chunk of gold (literally or imagely) – In the process, a common investment mistake was made Buy at a high priceHe said.
“If you’re going to make money with gold, you need to buy and sell it and want to sell it at the right time,” Baker said. “If you go in now, are you buying at the peak? I don’t know.”
Why gold prices rise
Investors often view gold as a safe haven in turbulent times and buy assets in situations of high uncertainty.
“I think we can check that box now,” he said.
That is, “In real times of crisis, bonds are brighter than gold.”
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Additionally, many investors buy gold because they think it is a good inflation hedge, Samana said. (data Not always supported This investment paper. ) Investors are concerned about recent data, which shows progress in inflation Maybe it’s stagnantHe said.
Samana said that U.S. sanctions on Russia have been the “turbocharger” of gold returns for the past year or more.
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Samana said the sanctions have led some central banks, most notably China, to buy more gold rather than Treasury bills, to avoid potential difficulties with assets denominated in US dollars during future geopolitical conflicts.
He said that this makes gold demand higher than the price a year ago – and its price.
“Don’t chase” gold return: “Overall, you might want to postpone precious metals at the (current) level.”
Experts don’t want gold to continue to shine.
“In my mind, there is no reason gold will continue to produce a significant upward trend, forbidden – I certainly won’t – some kind of lasting war.”
How to invest in gold
On January 17, 2025, Sanshandao Gold Mine, Laizhou, Shandong Province, China.
CFOTO/Future Publishing by Getty Images
Baker recommends getting investments through funds like exchange-traded funds or by investing in stocks in gold mining companies, rather than buying physical gold.
Baker said that if investors need to sell assets, funds and stocks are usually more liquid. Baker said investors with a lot of physical gold might additionally store it somewhere and guarantee it. Insurance may cost investors 1% to 2% Or more The value of gold every year.
Similar to Baker, Samana believes investors can hold 1% to 2% of their gold portfolio at 1% to 2%.
Samana said investors interested in buying gold should see it as a broader portfolio of commodities, which could include the distribution of precious metals such as copper such as energy, agriculture and copper, as well as precious metals such as gold.
He said Wells Fargo’s overall commodity allocation ranges from 2% to 7% growth for conservative investors.