3 big gold investing mistakes to avoid in 2025
Gold investing spiked to an 11-year high in 2023, and the price of the precious metal surged past numerous records in 2024. In turn, many investors are understandably intrigued by how the yellow metal could perform in 2025. If you're one of those investors or are already invested in gold and looking to expand further, then, it helps to know the nuances of this asset. For example, gold is considered to be less of an income-producing asset and more of a protector against inflation and wider economic turmoil.
But, at the start of a new year, it also helps to know some specific but easy-to-make mistakes that could significantly hurt your potential earnings. Below, we'll detail three big gold investing mistakes that both beginners and current investors should avoid in 2025.
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3 big gold investing mistakes to avoid in 2025
A gold investment, while valuable, may not be as familiar to some as stocks, bonds and even real estate. So you'll want to be both careful and strategic in your approach. To that point, it's critical to avoid making the following timely mistakes in 2025:
Overinvesting on the assumption that the 2024 price surge will continue
The price of gold was listed at around $2,000 an ounce in January 2024 and ended the year close to $2,700 an ounce, resulting in a remarkable 35% price growth in barely 12 months. But the economic landscape of 2024 that contributed to that rise — like uneven inflation, interest rate movements and more — is unlikely to be replicated in 2025. So it would be a mistake to invest in the metal on the assumption that the 2024 price surge will continue unabated this year. And overinvesting on this assumption (meaning anything more than 10% of your overall portfolio) could compound that mistake. So, don't do either. Get invested in a moderate amount and monitor the market throughout the year for further opportunities.
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Assuming the price will drop much lower
The price of gold did drop after it passed the record $2,700 mark in late October 2024. But it only briefly hovered around the $2,500 mark before climbing back up again, so assuming the price will drop much lower than that in 2025 would be a mistake. It's important to remember that, historically, accounting for some small drops, the price of gold tends to only rise in value. This is one of the reasons why it's such a critical asset, no matter the form. Assuming that you can wait out the market for a more optimal time to invest in the metal would be a mistake, particularly if the price continues its upward trend as has been the case in recent weeks.
Investing in the wrong type
Gold IRAs. Gold ETFs. Gold stocks. Gold futures. These are just some of the gold investment types to explore. But they don't all come with the same set of pros and cons. And some, like gold futures, can be particularly risky for investors that don't have expert knowledge of this asset type. It's critical, then, to avoid investing in the wrong type of gold, particularly at today's elevated entry price point. Instead, speak to current investors and experts and research all of your options. What may feel like the right gold investment on paper may not be once you've taken the time to research each type.
The bottom line
Gold investing offers unique benefits and protections that other assets can not. But it also comes with inherent risks and easy-to-make mistakes that should be avoided, no matter your investor profile. By avoiding these errors now, and by taking a cautious but strategic approach to the metal this month, you can better set your investment portfolio for gold investing success both in 2025 and the years that follow.
