Gold price at record high: Should you be buying or selling?

The price of the precious metal is up more than 80 per cent across the last year

Gold is back in the headlines after smashing through the $5,000 barrier, just a week after another rise came on the back of Donald Trump threatening tariffs over the pursuit of Greenland.

The ongoing geopolitical uncertainty - not just around the US but in Japan’s bond market and wider EU uncertainty too - has many investors heading for gold and silver, rather than currencies and stock markets.

So, where does it stand now, and how do you buy or sell?

How high has the gold price risen?

At the time of writing, gold is priced at $5,095 an ounce, having earlier in the day tipped just above the $5,100 mark.

That’s a rise of over 12 per cent in the past month and more than 83 per cent in the past year. Since the start of 2024, gold has continually pushed higher in price at a faster rate, setting continual new record highs along the way.

For some context, the FTSE 100 is up 19 per cent over the past year.

Why buy gold, and should everyone have some?

Gold has long been seen as a “safe haven” – in other words, a place investors put their money when there is uncertainty in other areas, like government bonds or the stock market.

The precious metal isn’t usually so volatile, and over long periods can grow in value.

However, unlike other assets like shares in a business (through dividends) or cash in the bank (with interest), it does not “pay out” anything, meaning in periods of no price growth, it can lag behind other means of growing wealth.

Unlike other metals, such as silver or platinum, gold isn’t typically as widely-used in manufacturing and production, so the value of it is largely limited to being a store of value.

In addition, stock markets (or parts of them) can rise rapidly when conditions are right, meaning an over-exposure to gold can mean you miss out when the metal is no longer in favour.

Experts tend to recommend no more than 5-10 per cent allocation toward gold in a diversified portfolio of investments, but the real amount you require depends on a range of factors specific to you: timeframe, amount, risk tolerance, whether you are focused on preserving wealth or generating it and plenty more.

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How do you buy and sell gold?

You can, of course, buy physical gold bars - called bullion - but the complexity of this, along with storage and insurance costs of doing so, makes it improbable for most people.

However, a simpler method is to buy what’s called an exchange-traded commodity (ETC) – these are investment vehicles which essentially track the price of gold for you and will rise or fall in accordance with gold’s spot price. There is usually a small annual charge associated with them.

The price of gold has increased by over 12 per cent in the past month (Getty Images/iStockphoto)

Examples of these are the iShares Physical Gold ETC (ticker SGLN on the London Stock Exchange) or the Royal Mint Responsibly Sourced Physical Gold ETC (ticker RMAU).

If you buy these within a stocks and shares ISA, any gains made will be tax-free.

Alternatively, you can directly invest in the companies which mine gold, or you can invest in a more broad fund which includes gold in its holdings if you don’t want a pure focus on one single metal.

What do the experts say?

Most analysts and companies tracking commodities – such as oil or copper, as well as gold or silver – think there’s still scope to go higher, though nobody knows when the tide might turn.

Geopolitical stresses can change at any moment, but more than one researcher has put a target of $6,000 for gold before 2026 is out.

Susannah Streeter, chief investment strategist at Wealth Club, points out the impact the dollar has on metals. “In this febrile geopolitical environment, gold for now seems to know no bounds. The pile on into the gilded safe haven is continuing with the precious metal racing up higher. It vaulted over the psychologically important 5,000 mark on a glittering streak, heading sharply higher as trade tensions emanating from the US, unnerved investors,” she said.

“The dollar’s decline is part of the story. The greenback has taken another hit as concerns continue to swirl the impact of tariffs, high government spending and inflation on the US economy, prompting investors to rethink exposure to the US. A weaker dollar makes precious metals more attractive to buy given they are denominated in the currency. As the march towards shelters offering security continues with the preservation of capital the priority, gold and silver are shining.”

One researcher has suggested that the price of gold may reach $6,000 an ounce before 2026 is out (PA Media)

Lale Akoner, global market analyst for eToro, added that gold is replacing long-term bonds as a defensive store alongside other investments. “Gold is increasingly being used by investors as a hedge against equity risk, and in many portfolios, it is starting to replace long-duration government bonds as the preferred defensive asset. The shift reflects a structural breakdown in the traditional equity-bond relationship.

“Since 2022, correlations have hovered around zero, which has reduced bonds’ effectiveness as a diversifier.

“Gold, by contrast, has held up better as a defensive asset. If the bond-equity correlation remains unstable, gold’s role as a volatility dampener could become more entrenched, reshaping how portfolios hedge downside risk across the cycle.”

Market research firm Yardeni say the outlook for gold will send the price even higher. “We are still targeting $6,000 by the end of this year and $10,000 by the end of 2029,” they said.