With the price of gold topping $4,000 an ounce for the first time Tuesday, you might be wondering whether the precious metal should be a bigger part of your investment strategy.
Prices have soared by 54% so far this year, putting it on track for its best yearly performance since 1979.
Investors often turn to gold when they lose confidence in other assets, typically in periods of economic uncertainty or market stress, because it’s seen as a store of value that holds its worth.
And when the U.S. dollar declines, gold becomes cheaper for international buyers, boosting demand. That’s helped push prices higher this year, with China’s central bank stockpiling gold as it moves away from U.S. securities, says Rob Haworth, senior investment strategy director at U.S. Bank Wealth Management.
The run-up in prices is also reflected in demand for gold-backed exchange-traded funds, or ETFs — which you can buy in a brokerage account and trade like a stock — making them one of the easiest ways to invest in gold. These funds recorded their biggest month ever for investor buying in September, according to the World Gold Council.
