Double explosure with businesss charts of graph and rows of coins for finance at night city … [+]
getty
With a presidential transition on the horizon, the U.S. is facing heightened economic uncertainty as we move into 2025. As a result, many Americans are considering investments that can help them hedge against any potential changes to market conditions. Though it may not be the first thing that comes to mind, gold is actually one of the most stable assets you can add to a diversified portfolio, as its value remains relatively stable against economic headwinds like inflation, dollar devaluation, and lower interest rates.
Historically, gold and precious metal assets have demonstrated resilience during economic downturns and political shifts. Take the 2008 financial crisis, for example. While the value of stocks and other financial assets plummeted, gold prices surged as investors sought out more resilient and stable assets amidst widespread economic instability. We saw a similar trend during the oil and energy crises of the 1970s. Amidst skyrocketing inflation and economic stagnation–and even Nixon’s elimination of “the gold standard” in monetary policy–the value of gold still increased, solidifying its reputation as a safeguard against inflation and political volatility.
While an economic downturn is not necessarily a near-term inevitability, uncertainty alone is cause enough for investors to rebalance their portfolios, and gold can be an ideal addition for those who are especially risk-averse.
There are many ways to invest in gold, so we’ve listed some of the most popular gold assets and investments to help you decide which is right for you.
Gold Bars
Gold bars offer a tangible way to invest in gold, as they have intrinsic value and are widely recognized. For those who value physical assets, gold bars can be a great choice because they are not tied to financial market fluctuations. It’s worth noting that gold bars do require secure storage, so investors should consider additional insurance and maintenance costs associated with this type of gold asset. Liquidity is another factor to keep in mind, as purity verification may be required when reselling. Gold bars are ideal for long-term investors looking for a stable asset they can physically hold. Companies like Bishop Gold Group, JM Bullion, APMEX, and Kitco are some of the top providers of physical gold bars.
Gold ETFs (Exchange-Traded Funds)
Gold ETFs provide exposure to gold without the need for physical storage. Easily traded on stock exchanges, Gold ETFs offer liquidity and lower transaction costs, making them an accessible and convenient choice for short- and long-term investors alike. One thing to be aware of is that Gold ETF investors don’t actually own physical gold. Instead, they hold shares that are backed by gold, which can be subject to the same management fees associated with traditional ETFs. These ETF shares also have more exposure to market fluctuations, meaning their pricing and inherent value can be slightly more volatile than that of physical gold. Gold ETFs are great for investors who prefer the convenience of trading on the stock market without handling physical assets. Popular gold ETFs include SPDR Gold Shares (GLD), iShares Gold Trust (IAU), and Aberdeen Standard Physical Gold Shares (SGOL).
Gold Coins
Gold coins combine collectability with the intrinsic value of gold. Coins such as the American Eagle and Canadian Maple Leaf are highly recognizable and relatively easy to sell, making them a popular choice among gold enthusiasts who appreciate their financial value, as well as their historic and artistic value. Due to their collectibility, gold coins often come with a premium above the spot price, and– similarly to gold bars– investors should be mindful of storage and insurance costs. Gold coins are generally best for investors interested in collecting as well as investing, as well as those who appreciate the aesthetic value of tangible assets. Bishop Gold Group, Bullion Exchanges, and U.S. Mint, are all reputable providers of gold coins.
Gold Futures
Gold futures allow investors to control a large position in gold with a relatively small capital investment, making them a tool for potentially high returns. This flexibility is appealing for traders with short-term goals or those looking to hedge other gold investments. However, gold futures are highly volatile and require sophisticated knowledge, meaning they are generally not advisable for novice investors. Gold futures are best for experienced traders with a high risk tolerance. Futures contracts are available on the Chicago Mercantile Exchange (CME) and can be accessed through brokers such as Charles Schwab and Interactive Brokers.
Gold IRAs
Gold IRAs allow investors to include gold in their retirement portfolios, with tax advantages similar to those of traditional IRAs. These accounts are ideal for investors looking to add a stable, tangible asset to their long-term retirement savings. Investors should be aware that gold IRAs come with higher setup and maintenance fees and are subject to strict IRS regulations on the types of gold that can be included. And like a traditional IRA, early withdrawals may incur penalties, they are less liquid than other gold investments. This makes Gold IRAs most appealing for investors with a long-term horizon who want a stable hedge in their retirement plans. Companies like Augusta Precious Metals, Goldco, Bishop Gold Group and Regal Assets are some top providers of Gold IRAs.
Digital Gold
Digital gold offers the convenience of buying and trading small amounts of gold online without dealing with any physical storage. This type of investment allows flexibility and easy access, making it ideal for investors looking for low-cost entry points into gold. Investors should be mindful of the fact that digital gold is less regulated than traditional gold assets, and fees may apply when converting digital holdings to physical gold. Digital gold is ideal for investors who value convenience and flexibility in their gold purchases, or those who lack the space or resources for physical storage. Platforms like OneGold, CyberMetals, and Gilded offer digital gold options.
Stabilizing your financial future
No matter the format, gold’s enduring value can be a great addition when it comes to fortifying your portfolio against market fluctuations and economic headwinds. And as we head into 2025, choosing the gold investment that best aligns with your financial goals, investment experience, and risk tolerance can set you up for stability– regardless of what the economy may have in store.