Investing is a discipline where you should always be aware of market movements and continuously adjust your portfolio according to market conditions. However, many investors limit themselves to stocks, bonds, and digital assets when it comes to planning their investments, missing out on the benefits associated with precious metals. Gold, an asset that has delivered handsome returns in the long run, is widely popular among professional investors. There are many reasons for retail investors to gain exposure to this precious metal in 2025.
The price of gold shattered records in 2024, recently hitting an all-time high of $2,730 per ounce. While inflation concerns and expected interest rate cuts by the Federal Reserve are creating uncertainty across the markets, it is high time for you to consider adding gold to your portfolio.
We have compiled 10 reasons why you should buy gold in 2025.
1. Hedge Against Inflation
Gold is one of the few assets that are inflation-resistant. As a finite resource, the dynamics of supply and demand always keep the price of gold relatively stable, as there is always an appetite for it. It’s a good investment during times of inflation because it retains its purchasing power. In fact, gold prices often increase during inflationary periods, offering better returns than other investments. Thus, gold can be used as a hedge against inflation. Its intrinsic value helps maintain purchasing power even during hyperinflation.
2. Diversify Your Assets
Gold serves as a unique and effective tool for portfolio diversification. A properly diversified portfolio is key to reducing investment risk. Diversification can be achieved by investing in different asset types. Since gold is not as volatile as stocks and is not positively correlated with the stock market, its value remains independent of stock market performance and other economic indicators. Additionally, gold prices tend to appreciate in the long term, helping to absorb some of the negative impacts of adverse market movements on a portfolio.
3. Universally Accepted Asset
Gold has been used as a form of currency since the dawn of civilization. Precious metals are among the most trusted assets worldwide. Multiple factors contribute to their universal acceptance and intrinsic value. Gold and silver have low reactivity with other elements, making them corrosion-resistant. Additionally, they have relatively low melting points, allowing them to be easily turned into bullion and jewelry. Their excellent heat and electrical conductivity further enhance their value for industrial purposes. The universal acceptance of gold makes it easier for an investor to easily realize the value of an investment in gold in any currency worldwide.
4. Gold is an Easily Accessible Asset
Buying physical gold has become very convenient. It can be purchased from almost any part of the world at nearly the same price due to its limited supply. Gold can be had in a number of forms, including bullion bars and coins. As a universally accepted asset, it can be liquidated anytime an investor chooses by simply reaching out to a bank or dealer. Even though its value may fluctuate, gold’s intrinsic worth ensures that it can be easily sold or exchanged for another asset.
5. The Ultimate Currency That Has Never Failed
Gold has been used as a medium of exchange, a currency in other words, for many centuries before fiat currencies were introduced. Even after the global economy embraced fiat currencies, central banks have been keen to stockpile gold due to several characteristics of the precious metal that make it the ultimate currency that has never failed.
Gold’s natural properties, such as durability, portability, and fungible nature, make it a currency that can be accepted globally. In addition, gold prices have increased over the long term at a stable pace, making it easy for investors to own gold without much fear of volatility compared to many other asset classes. This makes gold a reliable asset class that can be considered a store of value. Put together these characteristics, gold is widely accepted as a valuable asset across the world.
6. Maintain Financial Privacy
Since gold is a natural resource that is not tied to any country or financial institution, it is hard for governments or any other entity to track gold holdings. This helps protect investors’ financial privacy. Additionally, physical gold can be stored securely outside the banking system, preventing assets from being frozen or seized.
7. Central Banks Are Trading Gold
Many central banks are turning to gold to counter risks associated with currency fluctuations and ever-evolving geopolitical tensions. In 2022, central banks added over 1,000 metric tons of gold and continued significant purchases into 2024 and beyond. This trend signals strong confidence in gold as a reserve asset. As central banks continue accumulating gold reserves, demand rises, putting upward pressure on gold prices.
8. Generational Wealth Preservation
Physical gold is a reliable means of wealth preservation and can be easily passed down to the next generation with minimal hassle. Gold’s extreme durability ensures it can be stored safely in various locations. Its inherent value allows wealth to be maintained in physical form and transferred across generations. What’s more, physical gold can be a meaningful gift, offering loved ones a sense of financial security.
9. Physical Gold Cannot Go Bankrupt
Gold’s intrinsic value, which is derived from its universal acceptance and demand across economies, ensures that it appreciates over time. Historically, gold has been regarded as a way to store value and served as a hedge against inflation and national or global economic uncertainty. Since gold held by individuals cannot be seized or devalued by financial institutions or governments, its value remains secure.
10. Gold Is Not Tied to a Specific Country or Government
Gold functions as a global currency since it is not linked to any country or government. Until the 20th century, gold played a direct or indirect role in the global monetary system. As a natural resource, gold is abundant enough to accumulate yet rare enough to retain its value, making it an ideal commodity for trade.
Gold holds value because people trust its worth, which is determined entirely by supply and demand. Many countries have natural gold deposits within their territories. While governments can influence gold prices by stockpiling or releasing large reserves into the market, ultimately, market forces dictate its value.
Waiting Can Be Expensive with Gold, Hurry Up
If you want to diversify your portfolio with a universally accepted and easily accessible asset that can be passed down to future generations, will not go bankrupt, and help maintain financial privacy, consider investing in gold as soon as possible. Historically, gold has acted as a hedge against inflation and continues to function as a global currency. Currently, many central banks are increasing their gold reserves amid rising geopolitical tensions.
If you are new to gold investing, start with small amounts of physical bullion and slowly build your way up. Read more on our site to learn more about buying and owning gold.
