There’s a reason gold has been a prized investment decade after decade: It’s a tangible asset that doesn’t lose value just because of a market crash or economic panic. And, lately, this precious metal has been back in the spotlight due to its impressive upward price trajectory. Over the past year, for example, gold broke numerous price records, and a big rally last month pushed prices to all-time highs above $3,400 an ounce, prompting an influx of investors to buy in and try to capitalize on the chance of future price growth. Gold prices have pulled back a bit in the weeks since, however, and are sitting at just under $3,370 an ounce as of late May.

This price dip has offered a more accessible entry point for investors who felt priced out just a few weeks ago, and the current economic environment is also making gold more attractive. Inflation has cooled from recent highs, but it remains sticky in some sectors. Interest rates are also still relatively high, and concerns about geopolitical instability continue to push investors toward safe-haven assets. That’s where gold, which is known for its ability to preserve wealth during times of uncertainty, comes in. This precious metal can act as a smart portfolio hedge, offering protection against currency fluctuations, recession risks or stock market volatility.

But if you’re a beginner looking to invest in gold right now, you’re entering at a time when it’s more important than ever to understand what you’re buying. So what exactly should beginner investors know about investing in gold this May?

Find out how gold could help protect your portfolio today.

3 things beginner gold investors should know this May

If you’re a gold-investing rookie, keep these things in mind as you get started.

Some gold assets are better bets than others now.

When most people think of gold investing, they picture shiny coins or gold bars stored in a vault. While physical gold is certainly an option, there are many ways to invest, each with different risks, costs and benefits. Right now, some options may be more favorable for beginners than others.

Physical gold, such as bullion or coins, provides tangible ownership, but it also comes with premiums, storage concerns and resale challenges. Given that premiums on physical gold have spiked in recent months due to high demand, investors may end up paying well above spot prices for these products.

Gold exchange-traded funds (ETFs) allow you to invest in gold without having to store it yourself. These funds track the price of gold and are much easier to buy and sell. And, right now, gold ETFs offer one of the most efficient and liquid entry points into gold investing for beginners.

Gold mining stocks and mutual funds tied to gold companies can offer more upside, but they also come with equity market risk. These tend to be more volatile than physical gold or gold ETFs because they’re tied to company performance and broader stock market trends. Given current market uncertainty and potential Fed rate cuts later in 2025, beginners may want to be cautious with mining stocks unless they’re willing to tolerate short-term price swings.

Start protecting your portfolio by adding gold to your asset mix now.

The price of gold doesn’t always go up when you’d expect.

It’s easy to assume gold will surge when the economy looks shaky, but timing the market isn’t that simple. Even though gold has a reputation as a safe-haven asset, its price is influenced by a mix of factors that can sometimes move in opposite directions.

Right now, for instance, the Federal Reserve is signaling potential rate cuts by the end of the year. Lower rates typically boost gold prices because they reduce the opportunity cost of holding a non-yielding asset like gold. But gold has already priced in some of that optimism, and if inflation flares back up or geopolitical tensions ease, prices could stabilize or even dip in the short term.

That doesn’t mean gold isn’t a good investment. It just means beginners should avoid chasing short-term performance. A better strategy is to think of gold as a long-term hedge rather than a way to score quick gains. Diversifying into gold now can help balance out riskier assets like stocks, but it shouldn’t be your entire portfolio.

Scams and premiums are a real risk, so do your homework.

One of the lesser-known risks of gold investing is the possibility of overpaying, or worse, getting scammed. Because gold is so popular in uncertain times, predatory sellers and misleading marketing often increase when demand surges. Beginners need to be especially careful right now, as gold’s recent run-up has likely brought a flood of new “opportunities” into the market.

Be wary of unsolicited gold offers, pressure to buy numismatic (collectible) coins over bullion or companies pushing you to put all your retirement savings into gold IRAs with high fees. If you’re considering physical gold, work with a reputable dealer with clear pricing transparency. Compare premiums, check ratings and avoid dealers who refuse to quote prices over the phone or online.

If you’re going the gold ETF or mutual fund route, stick with well-known platforms and funds with low expense ratios. Many beginners find these vehicles simpler and more secure, particularly when they’re just getting started.

The bottom line

Gold can be a smart addition to your investment mix, especially in a market filled with uncertainty. But if you’re new to it, the learning curve can be steep, and the risks are real if you don’t understand what you’re buying. This May, with gold prices cooling slightly and economic conditions shifting, beginners have a good opportunity to explore gold as part of a diversified strategy. Just remember that not all gold assets are created equal, timing the market rarely works and doing your homework is just as important as buying the asset itself.