10

Jul 2025

10

Jul 2025

Is gold a good investment?

By StoneX Bullion

Gold prices are up more than 27% so far this year, sitting at around $3,329 per ounce at the end of July. This makes it one of the best-performing asset classes in 2025 so far. If you haven’t invested in gold so far, don’t worry – you haven’t missed the boat! Gold has a long track record of delivering value over time, and that’s what makes it such a great investment.

If you’re still wondering whether it’s worth investing in gold in 2025, keep reading to learn why gold is a good investment, different ways to invest in this yellow metal, and when’s the best time to buy.

Is gold a good investment?

Let’s start by looking at what makes gold such a great investment.

1. Long-term store of value

Gold is a real, physical asset with intrinsic value. Unlike paper currencies, it doesn’t rely on any government, central bank, or financial institution to maintain its worth, and you can’t just print more of it on demand. Gold has been used as a form of currency for more than 2,500 years, and before that it was still prized for its beauty and rarity.

It’s true that gold’s value can fluctuate in the short term, but it has historically held its purchasing power over the long term. For example, $100,000 in gold in the year 2000 would still buy at least $100,000 worth of goods today. But $100,000 in cash would now only buy half as much due to inflation.

This is why gold is considered a hedge against inflation, currency devaluation, and economic instability. When prices rise and the value of paper money erodes, gold often holds – or even increases – in value.

2. Natural hedge against economic uncertainty

We’re only five years into the 2020s and we’ve already seen bank failures, pandemics, geopolitical tensions, and global debt. During these periods of economic uncertainty, investors often flock to gold for its role as a safe-haven asset.

Unlike many other investments, gold’s value doesn’t rely on earnings reports or policy changes. In fact, its price continued to climb in 2023-2024, even when inflation eased and interest rates went up. This shows that gold hedges not only against inflation, but also against risk in the financial system.

Read: Exploring the Role of Gold as an Effective Hedge Against Inflation

3. Portfolio diversification

Gold behaves differently to traditional assets like stocks and bonds, making it an excellent diversification tool. It tends to have an inverse correlation with equities or the U.S. dollar, meaning when they go down, gold goes up, and vice versa.

Adding gold to your portfolio can provide a cushion against volatility and smooth out returns over time. For example, during past market crashes, like the 2008 financial crisis, gold prices increased while the stock market plummeted.

See: Is There a Correlation Between the US Dollar and Gold Prices?

4. Limited supply

Gold is a rare metal with a limited supply. Gold reserves are finite, and it’s becoming less and less common to discover new gold reserves. In fact, the U.S. Geological Survey estimates that there are only about 20% of the world’s gold reserves left to be mined.

When you combine gold’s decreasing production with increasing demand, it’s likely that gold’s value will continue climbing into the future.

5. Global demand

Gold’s value goes beyond investment to practical use in jewellery, technology, dentistry, and even aerospace engineering. This adds another layer of demand that helps support its prices over the long term.

On top of that, central banks around the world are increasing their gold reserves as a way to strengthen financial stability. This demand for gold makes the scarce metal even more valuable as an investment.

See: Why Central Banks Buy Gold

6. Geopolitical hedge

Gold is more than just a safe-haven asset. It’s also known as a ‘crisis commodity’ because its price tends to rally during periods of political unrest, wars, or conflicts. Physical gold is globally recognised, easy to transport, and not tied to any one country or government, making it a resilient asset that can provide protection during periods of geopolitical instability.

Different ways to invest in gold

You have a few different options when it comes to investing in gold, and each has its own set of pros, cons, and risks. Below, we look at the three most common ways to invest in gold: buying physical gold bullion, investing in gold ETFs, and buying shares in gold mining companies.

Investing in physical gold bullion

Bullion bars and gold coins are the most direct way to invest in gold. This means you’ll hold gold in its purest form – your investment will be tangible, secure, and free from counterparty risk, giving you all the benefits of holding gold.

If your goal is wealth preservation or hedging against currency collapse, rising inflation, or geopolitical crises, buying physical gold is the way to go. Make sure to purchase only from trusted bullion dealers or national mints to ensure your gold meets investment standards.

Some benefits of buying physical gold include:


  • You own a real, tangible asset
  • There’s no third-party risk
  • Your asset is globally recognized and easy to value.


Some things to consider when investing in physical gold include:


  • Premiums: Dealers add markups to cover minting and handling costs, which means you’ll be paying slightly above the spot price of gold. Premiums are higher for gold coins compared to gold bars.
  • Storage: You need to think about how to securely store your investment. If you choose to use a bank or storage facility, this will come with extra fees (and also reduce accessibility, if that’s something you value).
  • Liquidity: It can take a bit longer to sell physical gold compared to selling gold ETFs or gold mining stocks.

Investing in gold ETFs

Gold exchange-traded funds (ETFs), like the iShares Physical Gold ETF or VanEck Gold Bullion ETF, are designed to track the price of gold. They’re backed by physical gold held in secure vaults and listed on major stock exchanges. You can easily buy or sell gold ETFs, just like stocks, making them a more convenient way to invest in this yellow metal.

Some of the benefits of investing in gold ETFs include:


  • Easy to trade
  • No need to think about physical storage
  • Low fees and higher liquidity compared to gold bullion.


ETFs are a great idea if you want exposure to gold prices without holding the physical metal itself. That said, you’re missing out on some of gold’s key features: you won’t hold a tangible asset, and you’ll still be subject to some counterparty and systemic risk.

Keep Reading: Everything You Need to Know About Gold ETFs

Investing in gold mining stocks

You can also gain indirect exposure to gold prices by purchasing shares of gold mining companies, like Newmont Corporation (NEM) or Barrick Mining Corporation (B). With this option, however, you’ll be investing in a business and not a physical commodity as with gold bullion or gold-backed ETFs. This means your profits will partly depend on gold prices, but also on how the company’s operations, including efficiency, production costs, management decisions, and so on.

The benefit with gold mining stocks is that they can potentially outperform when gold prices rally. For example, if a miner produces gold at $1,500/oz and sells it at $2,000, a $200 rise in gold prices (to $2,200) would boost their profits by much more than just 10%.

Some benefits of investing in gold mining stocks include:


  • Potential for greater returns than gold itself
  • Some miners pay dividends, providing extra income
  • Growth potential.


There are also risks, which include:


  • You’ll be exposed to operational issues, labour disputes, and regulations
  • Costs can rise with inflation, affecting margins
  • Prices aren’t always perfectly correlated with gold.


If you want more diversified exposure to gold miners, you can look at mining-focused ETFs, like the VanEck Gold Miners ETF or BetaShares Global Gold Miners ETF - Currency Hedged, which spread risk across multiple companies. This reduces the impact of a single mining company performing poorly. However, gold miner ETFs tend to be more volatile than physical gold or ETFs backed by bullion, although they may deliver more upside over the long term.

How should you invest in gold?

With these three different options, you may be wondering which is the best avenue for investing in gold:


  • If you’re looking for a simple and secure investment, physical gold is your best bet
  • If you want high liquidity and lower premiums, gold ETFs can be a good option
  • If you’d prefer high growth potential, then gold mining stocks may be the most suitable – just be prepared for more volatility.


Of course, you can also choose to spread your investment across each of these three vehicles.

See More: Why Buy Gold? Reasons to Invest in Physical Gold Bullion

Why some investors don’t buy gold

You might be wondering, “If gold is such a great investment, why do some investors – including Warren Buffett – choose not to invest?”. Great question!

One of the main reasons why some investors stay away from gold is that it doesn’t produce anything. As Buffett famously said, “Gold doesn’t do anything but sit there and look at you”. This means that, unlike bonds or shares in a company, gold doesn’t generate income, pay dividends, or reinvest profits to grow over time. It’s a passive asset.

Some investors simply prefer investments that generate cash flow or have the potential to compound value over time, like stocks, properties, or certain bonds. With gold, the only way to profit is if someone else is willing to pay more for it than you did (and past performance has shown us that, in most cases, they will).

How much gold should I hold in my portfolio?

So, how much gold should you be investing in? For many investors, gold holds a minority position within a balanced portfolio.

One common strategy is to hold between 5% and 10% of your portfolio in gold. This range is typically enough to help hedge against inflation, market volatility, or geopolitical risk, without dragging down performance when growth assets are going well.

If you invest less than 5%, gold might not provide the stabilising effect most people are looking for. If you invest more than 10%, it could limit your exposure to assets with higher long-term growth potential.

Learn More: How Much Gold Should I Own?

When should I buy gold?

Finally, many new investors wonder when is the best time to invest in gold, and that’s a valid question when gold keeps rallying to new heights in 2025. That said, you don’t need to perfectly time the gold market to benefit from holding gold over the long term.

The best strategy is dollar-cost averaging – buying small amounts of gold regularly to spread your purchases over time. This helps smooth out the ups and downs of price fluctuations and reduces the risk of buying in at a peak.

Buy gold bullion today

If you’re ready to invest in gold’s enduring value, we’re here to help. At StoneX Bullion, we stock an extensive range of gold bars and coins from the most prestigious government mints and refineries in the world.

We’re one of Europe’s most trusted precious metal dealers, and buy straight from the producers to save you from paying too much for your gold investments. We're also an affiliate member of the London Bullion Market Association (LBMA), a testament to our good trading practices and commitment to industry standards.

Browse our range of gold, silver, platinum, and palladium bullion products and start building your precious metals portfolio today.