Recently, the performance of the gold market has attracted significant attention from investors. Despite the soaring gold prices, investment experts are reminding investors to remain rational and cautious, avoiding common investment mistakes such as “chasing highs and selling lows”.
According to data from the SPDR Gold Shares fund, gold prices have risen by approximately 11% since the beginning of 2025, with a return rate of 42% over the past year. Gold futures prices have also increased by 10%, showing a 36% rise compared to a year ago.
Registered financial planner Lee Baker advised CNBC that the rising gold prices and return rates are luring more investors in. However, he emphasized the importance of Warren Buffett’s classic investment principle: “Be fearful when others are greedy, and greedy when others are fearful.”
Baker pointed out that the current market is becoming increasingly driven by greed, with many investors becoming overly optimistic due to the gold surge. Over-concentration in gold investments may elevate portfolio risk, especially considering the distance gold prices have moved from their lows. Investors should maintain a clear mind, analyze future trends rationally, and avoid falling into the trap of “buying high and selling low” that could lead to investment failures.
One of the main reasons for the rise in gold prices is the global economic uncertainty. Gold is often seen as a safe haven for funds, particularly during times of global turmoil when investors tend to purchase gold as a means to preserve value. Samir Samana, a global market strategist at Wells Fargo Investment Institute, believes that the current global economic uncertainty has made gold a top choice for investors. Sanctions imposed by the United States on Russia since 2022 have also led some central banks of certain countries, especially China, to shift their investments towards gold rather than U.S. treasuries, thereby increasing the demand for gold and driving its prices up.
Furthermore, gold is also viewed as a hedge against inflation. As global inflation pressures mount, many investors are turning to gold and other precious metals, believing they can effectively counter currency devaluation. However, Samana noted that gold’s performance during inflationary periods is not always outstanding. Historical data shows that in certain crisis periods, bonds may outperform gold. Therefore, investors should consider various factors comprehensively when investing in gold and avoid blindly following trends.
Although gold prices have been on the rise recently, experts generally believe that this trend may not sustain in the long term. Baker explained that unless there is a large-scale geopolitical crisis or prolonged war, gold is unlikely to maintain a prolonged uptrend.
He recommended investors to indirectly invest in gold through funds or gold mining company stocks, rather than directly purchasing physical gold. Funds and stocks have higher liquidity, making it easier for investors to sell when needed, while holding physical gold involves additional expenses and complexities such as storage and insurance.
Samana also suggested keeping the proportion of gold in a diversified investment portfolio between 1% and 2%, not exceeding 3%. Gold should not be the main component of the portfolio but should be part of a diversified commodity investment portfolio alongside energy, agriculture, copper, and other basic metals.
(This article is for general informational purposes only and does not imply any recommendation. Epoch Times does not provide investment, tax, legal, financial planning, real estate planning, or other personal financial advice. For specific investment matters, please consult your financial advisor. Epoch Times does not assume any investment responsibility.)