Gold prices are climbing once again. What gold assets should I invest in now?
Gold's remarkable journey throughout 2024 was nothing short of historic, with the precious metal repeatedly shattering price records and ultimately reaching an unprecedented high of over $2,700 per ounce late in the year. This stellar performance was driven by a range of factors, including ongoing global economic uncertainty, geopolitical tensions and investors' persistent search for reliable safe-haven assets. As the year drew to a close, though, that trend shifted and gold prices experienced a modest pullback.
While this temporary price decline may have disappointed investors who entered the market during the period of peak prices, it also created an attractive entry point for those who had been waiting on the sidelines to buy into gold. The dip provided an opportunity for both new investors to establish positions and existing holders to average down their purchase prices, demonstrating the importance of timing and patience in precious metals investing.
But as we enter 2025, gold's price trajectory appears to be shifting once again. After several weeks of stability around $2,600 per ounce, gold prices have been steadily climbing back toward the $2,700 mark. This renewed upward momentum is prompting many investors to reassess their gold investment strategies, as different types of gold assets can perform differently in a rising price environment.
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What gold assets should I invest in as the price rises again?
Understanding which gold investments make the most sense during price increases is crucial for maximizing potential returns while managing risks. If you want to invest in gold now that the price is rising, the assets outlined below could be a smart bet:
Physical gold bars and coins
During periods of rising gold prices, physical gold often becomes particularly attractive to investors seeking direct exposure to price appreciation — and it remains one of the most straightforward and trusted ways to invest in gold. One of the main benefits of investing in physical gold is that when prices rise, the intrinsic value of these tangible assets increases, making them a reliable choice for wealth preservation.
While premiums over spot prices tend to increase when gold prices rise, larger bars (1 ounce and above) typically offer the most efficient way to own physical gold, as they carry lower premiums than smaller units. Premium-grade collectible coins, while carrying higher dealer markups, can also provide additional potential for appreciation beyond just the metal's value, as rising gold prices often correlate with increased numismatic premiums. However, investors should also consider storage and insurance costs before opting for physical gold.
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Gold mining stocks
Investing in shares of gold mining companies can also be an effective way to leverage rising gold prices. When the prices rise, gold mining stocks often exhibit amplified price movements compared to the metal itself, meaning they can offer higher returns during bullish gold markets. Senior miners with established operations and strong balance sheets typically provide more stable appreciation potential, while junior miners offer higher risk-reward opportunities as exploration success becomes more valuable in a rising price environment.
This type of investment carries additional risks, though, as mining stocks are influenced by factors like operational efficiency, geopolitical risks and fluctuations in energy costs. Diversifying across several mining companies can help mitigate these risks.
Gold streaming and royalty companies
Gold royalty and streaming companies offer an alternative approach to investing in the gold sector — and investing in them can pay off during periods of rising gold prices. These specialized firms provide upfront capital to mining companies in exchange for a percentage of future production or revenue, and unlike traditional mining stocks, royalty companies are less exposed to the operational risks of mining and often benefit from steady income streams. In a rising gold price environment, their earnings and share prices typically improve, making them a compelling investment to consider.
Gold ETFs and mutual funds
For investors seeking liquidity and convenience, gold exchange-traded funds (ETFs) and mutual funds may be worth considering during price increases. Physical gold ETFs, which track the spot price directly, offer efficient exposure without storage concerns. Gold mutual funds, on the other hand, focus on gold mining companies and can provide diversified exposure to the sector's operational leverage. Some funds even employ options strategies to enhance returns during upward price movements while providing some downside protection.
Gold options and futures contracts
For experienced investors seeking leveraged exposure, gold futures and options can be a powerful tool. Futures contracts allow investors to speculate on gold prices at a specific date in the future, while options provide the right but not the obligation to buy or sell gold at a predetermined price. These instruments can generate substantial profits during a price surge, but they come with higher risks due to market volatility and the potential for significant losses. So, it's important to approach this option with caution and ensure that you have a solid understanding of how these markets operate before investing.
The bottom line
With gold prices on an upward trajectory again, investors have multiple options for positioning their portfolios to potentially benefit from this trend. The key is matching the investment vehicle to your risk tolerance, investment timeline and market outlook.
Regardless of the gold investment vehicle you choose, though, it's crucial to remember that gold prices can be volatile even within an upward trend. In turn, a diversified approach that different types of gold assets may offer the best balance of opportunity and risk management in the current market environment.
