“Synopsis”
In a year filled with economic uncertainties, inflation, and market volatility, gold has once again entered the spotlight. This blog explores whether gold remains a good investment in 2025, using past data and real-world performance. We explain how gold behaves during inflation, what options investors have to invest in gold, and how much to allocate in your portfolio.
Is Gold a Good Investment in 2025?
Why Gold Still Matters
Gold is more than a precious metal. It plays a crucial role in:
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Protecting wealth during inflation
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Acting as a safe investment during market crashes
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Providing diversification in an investment portfolio
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Maintaining value when other assets fall
Gold’s Performance in Past Market Crashes
2008 Global Recession
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Stock markets fell by over 38 percent
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Gold gained around 25 percent
Gold protected investor wealth while equities plummeted.
2020 COVID-19 Crash
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Stock markets dropped sharply
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Gold surged and reached over $2,000 per ounce within months
Investors moved to gold as a safe haven.
2022–2023 Inflation Phase
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Global inflation rose to multi-decade highs
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Gold prices remained stable between $1,900–$2,000 per ounce
Gold retained its value even as fiat currencies lost purchasing power.
Gold and Inflation: A Proven Hedge
Historical Example
During the 1970s inflation era:
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Inflation crossed 10 percent in the US
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Gold rose from $35 per ounce to $850 per ounce
This represents a massive increase, proving that gold performs exceptionally well during inflationary periods.
Is Gold Still a Hedge in 2025?
Yes. In 2025:
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Inflation remains elevated in several major economies
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Investors are uncertain about interest rates and global growth
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Central banks continue to buy gold to reduce dollar dependence
Central banks purchased over 1,100 tonnes of gold in 2024, which was the highest in recorded history.
How to Invest in Gold in 2025
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Sovereign Gold Bonds (SGBs): Offer 2.5 percent annual interest along with price appreciation
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Gold ETFs: Tradeable on the stock exchange with no physical handling
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Digital Gold: Easy to buy in small quantities via mobile apps
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Gold Mutual Funds: Professionally managed exposure to gold assets
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Physical Gold: Traditional method, includes coins, bars, and jewellery
Ideal Allocation in Portfolio
Financial experts suggest keeping between 5 to 15 percent of your portfolio in gold, depending on your risk profile. Gold provides long-term wealth protection and balances high-risk assets.
Advantages and Disadvantages of Gold
Advantages:
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Acts as a hedge against inflation
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Preserves wealth in uncertain times
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Globally recognized and liquid asset
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Non-correlated with stocks or bonds
Disadvantages:
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Does not generate income (except SGBs)
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Prices can remain stagnant for years
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Storage costs and safety concerns with physical gold
Should You Buy Gold in 2025?
Given the economic landscape, gold is still relevant. With inflation pressure, slow global growth, and volatile equity markets, gold is a low-risk store of value. It’s especially important for conservative and long-term investors.
Conclusion
So, is gold a good investment in 2025? The answer depends on your goals. If you are looking for steady, long-term protection of your money, gold remains a solid asset. It may not make you instantly rich, but it can prevent you from losing wealth in unstable markets. Always consider your risk appetite and diversify wisely.
