Gold Is Still Trending as a Top Alt Investment
This year’s bullish stock market has been front and center for most investors, but gold is vying to steal the show. Often known for being inversely correlated with stocks and used as an alternative hedge during times of economic uncertainty, gold has pounded through new highs in lockstep with the stock market all year long — and shows no signs of slowing down.
Gold topped $4,000 an ounce for the first time earlier this week, marking a 50% rally year-to-date and smashing multiple previous all-time highs along the way. Many analysts think it has more room to run, with Goldman Sachs eyeing a $4,900 price target within the next 12 months.
What’s behind this run — isn’t a gold rally usually a sign of economic headwinds? Yes, sometimes it is, and this very well may be one of those cases. Several different throughlines could be contributing to this price action. Some of this movement stems from a weakening U.S. dollar, which savvy investors often view as a cue to stack a bit more gold — and right now, the greenback is down around 10% this year. The dollar also underpins global trade, commodities, and central bank reserves, meaning that swings in its value ripple through everything from oil prices to emerging-market debt. This is underscored by other, related concerns, including tariff uncertainty, national debt worries, inflation, and, most recently, the government shutdown, which is also not helping.
Of course, the lynchpin holding this entire investment strategy together is still social sentiment. These fundamental reasons may be the initial catalyst, but now it’s a narrativized trend — we’re reporting on gold, people are discussing it on social media, and even Costco is selling literal gold bars to meet demand.
It’s not just an individual thing, though; central banks are also fueling the surge, buying aggressively as part of a long-term effort to diversify away from dollar holdings. That “multi-decade trend” means the physical demand for gold isn’t going away anytime soon. At the same time, concerns about Fed independence, political uncertainty, and lingering equity volatility continue to draw retail investors in.
For most individuals, buying gold doesn’t mean actually piling bricks of it in your crawlspace; it’s via gold ETFs like SPDR Gold Shares (GLD) or iShares Gold Trust (IAU), which track bullion directly and avoid the headaches of storing coins or bars. Financial planners generally suggest keeping gold to less than 3% of a portfolio — enough to provide a hedge, without betting the farm on a commodity that can swing wildly.
