Gold prices surged above $3,000 for the first time on Friday, driven by concerns over inflation and market volatility. The precious metal has risen 10-fold since 2000, attracting smaller investors despite being less liquid than often made out to be.
While central banks have historically fueled gold’s rally with massive buying sprees, traders have benefited from their bets in recent years. However, with interest in gold picking up, smaller investors may want to reconsider adding bullion to their portfolios due to liquidity issues.
Experts say the metal is not easily convertible into cash and exchangeable for other goods and services. Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management, noted that gold is often seen as a safe-haven asset during uncertain times, such as when “everyone just needs liquidity.”
Central banks dominate the market, with countries like China pushing for de-dollarization, which has fueled gold’s rally. The U.S. dollar has weakened in recent weeks, making gold cheaper for foreign buyers.
Investors see gold as a way to preserve value amid macroeconomic turmoil. However, not all experts agree that bullion provides this function for investors, highlighting the need for caution before adding gold to portfolios.
Source: https://fortune.com/2025/03/15/gold-prices-smashing-record-highs-but-risky-bet