Want to invest in gold? This is the number to watch

Gold has once again shown its resilience to volatility, this month hitting historic highs of close to $USD3500 per ounce.

This consistent outperformance has once again proven gold is a true hedge against the broader volatility we are seeing in local and global share markets.

But why is gold soaring and is it too late to get in on this 'golden' opportunity?

The answer lies in a combination of economic uncertainty, geopolitical risks, and your investment goals.

The rise and rise of gold

Gold has gained more than 40% over the past year, significantly outperforming traditional asset classes.

Historically, gold has been a reliable store of value during periods of economic and market turmoil.

The price of gold tends to closely align to macroeconomic trends and geopolitical developments. When stock markets are volatile and uncertainty is high, investors turn to gold as a safe-haven asset.

Looking back over the past five years, the chart below shows greater uncertainty and instability being a driver of the price of gold.

Is it too late to buy gold?

With gold at record highs, some investors may wonder whether they have missed the rally.

But with trade policies, global tensions, and inflation all ongoing concerns, gold may continue to shine for some time.

In fact, Macquarie Group recently projected that gold could hit $3500 per ounce by the third quarter of 2025 if current trends persist.

There remain a number of factors driving macroeconomic uncertainty and supporting the price of gold. In the near term, this includes:

• US tariff turmoil sparking recession fears: US President Donald Trump's fluctuating tariff policies have unsettled markets, prompting investors to seek safe-haven assets. Recession fears are mounting as policy uncertainty under the new administration grows.
   
• Central bank buying spree: Global central bank gold purchases remain strong, continuing a multi-year trend of increasing reserves as a hedge against economic instability. Data from World Gold Council shows gold buying by central banks topped 1000 tonnes for the third year in a row in 2024, highlighting a persistent accumulation trend.

• Geopolitical tensions: Gold has benefited from ongoing geopolitical issues, including escalating tensions with the US and China and ongoing conflicts in Europe and the Middle East. With 'onshoring' increasing, globally, this trend is set to continue. 
   
• Inflation and Fed expectations: February's cooling inflation has raised speculation that the US Federal Reserve may consider policy easing in the coming months, while the RBA has already begun a rate easing cycle, although slowly.

While short term price changes will no doubt occur, the longer-term trend remains strong.

The key level to watch is $3000.

Although breaking above it is a significant milestone, it has yet to be firmly established as a sustainable level of support. If gold sustains this level, it could act as a new floor for prices.

How to invest in gold

Gold has proven to be a resilient hedge against uncertainty, and with economic and geopolitical risks still looming, it remains an attractive asset for investors.

If gold's on your radar, you might be wondering: how do I actually invest in it?

In good news, you don't need to go to the national mint and buy a gold bar to store under your mattress. The reality is gold can be bought and sold as easily as trading any other security.

Here's three ways to take advantage of the current gold rush:

1. Through an ETF offered by providers such as Global X (GOLD) or the Perth Mint (PMGOLD). Data from CMC Invest users shows investment in the GOLD ETF has doubled since this time last year.

2. Invest directly in an ASX-listed company involved in gold mining. Examples include Northern Star Resources (ASX:NST), Evolution Mining (ASX:EVN), or Newmont (ASX:NEM). On the back of gold's surge, 7 of the top 10 performers in the ASX 200 this year are gold miners.

3. For more experienced traders, derivatives are another way to invest. In fact, for many frequent and experienced CMC traders who use CFD instruments like these, gold is the top traded commodity.

For personal investors, gold can serve as a portfolio diversifier, helping to mitigate risks in turbulent times. Whether through ETFs, mining stocks, or physical holdings, gold remains one of the few assets that can offer protection in times of uncertainty-and right now, the world is full of it.

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