Gold prices surged to an all-time high of $3,000 per ounce last week, driven by the stock market’s recent slump. The precious metal has risen 12% so far this year, while stocks have plummeted nearly 7%. Experts say gold offers a hedge against uncertain stock performance and can provide diversification for investors.
However, some experts caution that gold prices are also volatile, especially when buyers enter the market at high points. Campbell Harvey, a professor at Duke’s Fuqua School of Business, warned that “gold is volatile” and urged investors to be careful.
The current price boom is attributed to economic uncertainty sparked by President Donald Trump’s tariffs. However, some experts predict that gains may eventually lose steam. Trevor Yates, an analyst at Global X, said gold can warrant a place in the portfolio for diversification purposes.
Harvey also emphasized the importance of not putting all eggs in one basket, suggesting that investors consider adding other safe assets such as Treasury bonds or real estate alongside gold. The market slump has marked the index’s first correction since October 2023, and the Dow suffered its worst one-week drop-off since 2023.
The flight to gold during market crises is rooted in decades of evidence, with the price of gold moving higher in seven out of nine major stock market selloffs stretching back to the late 1980s.
Source: https://abcnews.go.com/Business/gold-prices-soaring-good-investment-amid-stock-selloff/story?id=119867730