Is gold a good investment amid uncertainty?

Gold is broadly viewed as a hedge against global economic, political and fiscal uncertainty. When trade tensions intensify, policy shifts appear unpredictable, inflation expectations quicken or the macro backdrop weakens, investors treat gold as a safe-haven investment. They do so because bullion is a store of value that tends to rise while other assets falter, proving its usefulness as a hedge against rising prices and financial risks alike.

Is gold a good investment amid uncertainty?

Gold is favored by investors during periods of uncertainty or upheaval, and gold remains a reliable, risk-averse asset during economic uncertainty. Gold represents protection from uncertainty, and investors view gold as a safe haven during political and financial uncertainty. Retail investors, banks, and wealthy families have turned to gold as a safeguard against global economic uncertainty, and robust gold investment demand has been led by China, India, and Japan, upheld by economic uncertainty, geopolitical instability, local currency depreciation, and underperformance of risk assets relative to gold.

Gold is often viewed as a hedge against inflation and a safe-haven asset during periods of geopolitical uncertainty. Gold is a store of value during crises, and central banks stepped up gold purchases following Russia's invasion of Ukraine and the freezing of its USD assets in 2022, particularly in China, India, and Turkey. Central banks increased gold purchases to lessen their dependence on the US dollar, and gold purchases reinforce gold's attraction as an alternative to traditional currencies. Gold is an alternative to short-term sovereign currency-denominated assets, and gold is a currency that doesn't rely on any government. Gold tends to perform well in low-interest-rate environments, but gold performs poorly when real yields rise or risk appetite returns. Higher interest rates make gold less appealing because investors earn more in interest-bearing assets. Gold has recently diverged from its historical relationship with real yields, and is not a guaranteed answer in every financial condition. Most experts recommend getting investment exposure to gold through an exchange-traded fund that tracks the price of physical gold, and gold ETFs are the most liquid, tax-efficient, and low-cost way to invest in gold. Financial advisors generally recommend limiting gold exposure to less than 3% of one's overall portfolio, and gold bullion-backed ETFs do a better job than gold-related equities and gold miner stocks. Physical gold is less efficient due to higher transaction costs and storage considerations, and gold mining stocks underperform gold stocks due to business fundamentals.

The outlook for gold is backed by ongoing gold purchases by global central banks and heightened geopolitical strife, and Wells Fargo Investment Institute expects these factors to support demand growth for precious metals. The price of gold hit a record high of more than $4,000 an ounce, and a record $64 billion has been invested in gold ETFs so far this year according to the World Gold Council. Gold is a store of value that does not require yield, repayment, or liability to justify its function in a portfolio, helping to diversify a portfolio and reduce market risk.

I allocated a part of my portfolio to tangible precious metal because it functioned as a non-correlated asset that historically maintained its value. Carrying the physical resource gave safety that digital stock could not provide. I assessed its capacity to decrease total portfolio risk while other investments endured corrections. This strengthened my faith in its security, since precious metal's main function is wealth conservation, not speculation.

Thomas Goldfreburg

Investor at Goldfreed

Does gold rally amid market uncertainty?

Gold has surged in 2025, rising by around a third since April and reaching $4,142.53/oz, as investors flocked to traditional safe-haven assets amid intensifying market uncertainty. Federal Reserve easing, negative real rates and a softer dollar have pushed gold higher, while labor-market concerns and the threat of a government shutdown added fuel to the rally. Analysts note that the metal's advance underscores its enduring attraction as a hedge against uncertainty and as a barometer of market sentiment.

Central-bank demand has provided a steady foundation. Central banks collectively bought more than 1,000 tonnes of gold each year since 2022 and purchased 415 metric tons in the first half of 2025 alone, the World Gold Council reported. John Murillo said the rally has been fueled by this central-bank buying, and China's People's Bank of China has increased official reserves for eleven consecutive months. Wang Qing attributed the continuing gold accumulation by Beijing to political and economic shifts since the return of the Donald Trump administration.

Looking forward, UBS Chief Investment Office believes the rally has room to continue, with gold on track to record fresh highs next year. While short-term volatility and consolidation are possible, structural accumulation by central banks, anticipated Federal Reserve rate cuts and persistent geopolitical risks support an extension into early 2026, suggesting a potential recalibration in investor strategies toward wealth-preservation assets and global reserve diversification away from the dollar.

I see metals rally when the economic situation is uncertain. Gold is the main recipient of flight to security. I regard autonomy to be precious metal's best capability, for its worth is not linked to function of particular state or corporate bonds.

Thomas Goldfreburg

Investor at Goldfreed

Do gold prices fall amid tariff uncertainty?

Gold prices were floated by uncertainty over the legality of tariffs, yet gold futures on MCX saw a slight dip when President Donald Trump imposed 10 per cent duty using emergency powers. The 10 per cent duty remains in place while it's under the high court's review, and the Supreme Court sounded skeptical about constitutionality of tariff, so traders pre-empt the threat of tariffs by moving gold to the US. Safe-haven demand was driven by uncertainty over the legality of tariffs, but tariff uncertainty weighs on cargo owners and importers cautious, so London gold inventories have fallen but not as much as some think. Unexpected duty on gold imports increases the cost, and gold import tariff increases cost and creates upward pressure on gold prices, so investors must pay tariff when acquiring gold bars as a hedge against inflation and trade taxes.

How does gold price react amid trade uncertainty?

Gold price rise is endorsed by investors viewing gold as a safe haven during US China trade flare ups, trade tensions increased safe haven demand for gold, and investors flocked to safe haven metals amid trade tensions and Fed rate cut expectations. Gold price is a proxy for US China trade dispute intensity, so when trade flares, the price jumps, when trade is quiet, gold price normalizes.