Gold has established itself as one of the most reliable investment vehicles throughout history, particularly during periods of economic uncertainty. As we enter 2026, the question isn’t whether to invest in gold, but rather how to strategically incorporate it into your portfolio to maximize returns and minimize risk.
- What is gold as a commodity
- Why are commodities different than stocks
- What are precious metals like gold
- Should You Purchase Gold to Invest in ETFs
- Why has gold’s price increased in 2025
- Differences between gold and other investments
- Why is gold a good long-term investment
- Why investors invest in gold and silver
- When is gold a bad investment compared to the market
- Final words
- FAQ
What is gold as a commodity
Gold is a commodity that serves dual purposes in the global economy, functioning as a tangible asset and a form of currency, although the latter is less used. Unlike typical commodities such as oil or agricultural products, gold has maintained its intrinsic value for millennia due to its scarcity, durability, and universal acceptance.
Gold is a commodity because it is a physical asset that can be stored, exchanged, and even used. Because it’s a scarce asset, governments have seen it as a way to protect their national currency by investing in an asset likely to appreciate. Central banks, institutional investors, and governments participate in the gold trading market, creating and driving liquidity and demand.
Why are commodities different than stocks
Commodities differ from traditional equity investments because their value is tied to physical scarcity and global demand. By comparison, stock ownership depends on market performance and investor speculation.
The value of gold doesn’t depend on how well a company and its board performed; it can fluctuate due to geopolitical events. Commodities maintain their purchasing power when national currencies like the dollar lose value, operating as a hedge against inflation.
Compared to stocks, gold moves independently of the stock market. As shown in 2025, when gold prices increased by at least 67%, gold and silver continued to outperform the stock market even amid lower interest rates pushed by the US government.
Finally, gold has a finite supply, making it scarce and subject to supply-and-demand dynamics. By contrast, stocks can be reissued, burned, or repurchased, which can create inflated prices and sudden market shifts.
What are precious metals like gold
Precious metals, such as gold, are commodities valued for their rarity, resistance to corrosion, and ability to store value. Other commonly traded precious metals include silver, platinum, and palladium.
Investors typically access precious metals by purchasing bullion directly or through retail options like gold bars or coins. These metals are among the most accessible investment options for everyday investors.
Should You Purchase Gold to Invest in ETFs
Gold Exchange-Traded Funds (ETFs) offer a different way to gain exposure to gold prices without having to handle physical storage. While ETFs are regulated financial instruments that track the price of gold, they are much easier to access, as they can be traded on broker accounts and have low fees.
For a regular investor, purchasing both physical gold and ETFs is an option to consider. What’s important to understand is that ETFs are shares that represent the value of gold held in the fund’s storage, while buying gold outright is a tangible way to hold it.
Why has gold’s price increased in 2025
Gold prices increased by 68% year over year in December 2025, driven by a weaker US Dollar, geopolitical tensions, and limited access to the precious metal.
Looking at the past 30 years, the price of gold has generated average annual returns of 7.86%, while the S&P 500 has averaged higher returns at 10.67%.
On December 31st, the price of gold closed at $4339.65 and continued to rise, breaking the $ 5,000-per-ounce mark in early 2026. Over 5 years, Gold has increased by $ 3,167.49, or 178%, driven by global instability and a breakdown in traditional financial markets.
The gold price surge in 2025 was driven by multiple converging factors that created unprecedented demand. Gold reached approximately $4,409 per ounce, representing a 68% year-to-date increase as of December 2025.
Gold’s performance shows effectiveness as a crisis hedge when traditional investment relationships break down.
Differences between gold and other investments
Gold holds a unique place in the investment world, standing apart from stocks, bonds, and even other commodities. Unlike stocks, which offer dividends and the potential for earnings growth through ownership in productive businesses, gold focuses on preserving wealth rather than generating income or capital appreciation. Similarly, while bonds provide regular income and rely on the creditworthiness of their issuers, gold carries no credit risk or default possibility, making it a reliable hedge against sovereign debt concerns.
Compared with silver, gold is less volatile, more liquid, and widely favored by central banks as a reserve asset. While silver has greater exposure to industrial demand and the potential for higher returns, it also carries increased risk. Gold’s stability and universal appeal make it a cornerstone of wealth preservation, while other assets, such as stocks, bonds, and silver, cater to different investment needs and risk profiles.
Why is gold a good long-term investment
Gold has demonstrated itself to be a store of value over the decades and centuries, as it’s characterized by scarcity and is held by banks and governments as reserves. Even though it does not generate wealth through compounding interest, gold has proven to maintain its value against current debasement over longer periods.
For investors, a 30-year analysis shows that gold has continued to deliver better returns than most banks or bonds. Additionally, it has a low correlation with traditional investments, helping reduce portfolio volatility.
Physical gold provides tangible inheritance without counterparty risk, while historical performance during economic downturns provides insurance value.
Why investors invest in gold and silver
Investing in gold and silver is both a timely investment strategy and a strategy to diversify portfolios. Gold and silver outperform the market in periods of global uncertainty. In gold’s recent surge, it was triggered by geopolitical tensions between the US and other countries, the US Dollar’s weakening, and a shift by global banks to retain profits.
However, investors don’t allocate capital to gold and silver when risk appetite is higher and geopolitical volatility is lower. This means that investors are selling gold when there’s peace and pushing for precious metals acquisition when inflation is high, growth potential is limited, and even when there are signs of recession.
When is gold a bad investment compared to the market
Gold is not an attractive investment option when currencies are strong, and investors can pursue higher-risk, higher-return investments. It means gold is less favorable as an investment when interest rates exceed inflation, when there’s a high-growth phase across sectors, or when global volatility is lower.
Gold also poses challenges for income-focused investors, as physical metal generates no cash flow. The S&P 500 has historically outperformed gold over multi-decade periods, as measured by total returns.
Final words
Gold represents a strategic investment option for 2026, particularly for investors seeking portfolio diversification and protection against economic uncertainty. The precious metal’s 2025 performance demonstrated its continued relevance in modern portfolios, even as investment landscapes evolve.
Whether through physical gold, ETFs, or gold mining stocks, investors have multiple avenues to gain exposure to this asset class. The key lies in understanding your investment objectives, risk tolerance, and time horizon before allocating capital.
FAQ
Is it worth buying gold for beginners?
From our view, everyone could start investing in gold either by acquiring gold ETFs or purchasing physical gold from stores.
Can you buy gold bars in the Netherlands?
Yes, the Netherlands offers multiple channels for purchasing gold bars. Banks, specialized precious metals dealers, and online platforms facilitate gold bar purchases. Investors should verify dealer credentials and compare premiums above the spot price.
What is the best way to get exposure to gold?
From our experience, you can gain exposure to gold through ETFs, buying physical gold, or investing in gold mining companies. It all depends on your strategy and allocation, and always do your own research.
What are reputable online dealers for gold bullion in Europe?
Some examples of companies include BullionVault, GoldCore, and The Royal Mint. It’s always important to verify their regulatory compliance, transparency, and insurance coverage before investing.
