Gold investing strategies

Written by
Fact checked by
Adam N.
Apr 2024

As the name aptly suggests, gold is a precious metal to own. Both in the sense that it offers investors an opportunity for capital preservation and as an investment that comes with a certain price tag. Despite related costs, including gold in your portfolio can serve as an effective hedge in a world awash in uncertainties.

Gold investment considerations

Unlike some other commodities, gold doesn’t trade on a boom-bust cycle but behaves more like a currency. In a sense, it’s a bet against the US dollar and other fiat currencies. Here are some aspects you should consider if and when you decide to invest in gold.


Money managers argue that investing in gold is necessary if you want to build a balanced and diversified investment portfolio. You can use gold to manage and even out your portfolio's volatility and to shield yourself from the impact of inflation. Gold works in both inflationary and disinflationary environments as it is closely tied to real yields. Holding gold in your portfolio is a wise investment decision and you have a wide range of choices when it comes to gold investment options. A portion of it can be held in the form of physical gold (i.e. gold bullion), but it also makes sense to invest in gold ETFs and ETNs, as these are more easily tradable. 


Remember the age-old advice against putting all your eggs in one basket? Diversification is all about keeping your eggs in several baskets. Gold may protect you from the next tumble in the stock market (which will inevitably come sooner or later), and in theory it should shield your investments from the value erosion caused by inflation. In other words, investing in gold is a great risk management strategy as it promises to bulletproof your portfolio during times of market turmoil.

Spread out your risks

When you invest in gold, it’s best to spread out your purchases in time by putting a certain amount toward gold purchases at regular intervals. This strategy - called dollar cost averaging - will ensure that you don’t carry out all your purchases when prices are high and will help spread any related costs as well. 


As with any other investment, it makes sense to rebalance your portfolio from time to time (i.e. sell one asset high and buy another one low). How often you do this will depend in part on your tax situation and on transaction costs.

Asset choice

As mentioned earlier, there are many ways to get exposure to gold, ranging from gold bullion to gold futures, gold ETFs and mutual funds, or even stocks of gold mining companies. Each option comes with its own set of risks and costs. For example, buying stocks of gold miners or streaming companies involves special risks related to jurisdiction, permit issuance and mine accidents, to name but a few.
If you are at the beginning of your investment journey, you are probably better off choosing one of the more straightforward means of investing in gold. If you are unsure how to go about investing in gold, it’s always prudent to consult with a financial advisor or tax professional.

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Edith Balázs
Author of this article
I bring 20+ years of experience as a correspondent having worked for Bloomberg, Dow Jones and The Wall Street Journal covering macroeconomics, stock, currency and fixed-income markets. I hold a Master's degree in American Studies and Journalism.
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