Call it a golden era for gold.

After a historic 60% runup in 2025, the shiny stuff is hitting new highs this year, with prices currently exceeding $4,900 an ounce.

What’s good for gold isn’t necessarily great for other parts of the market. The precious metal has long been considered a “safe haven” asset, meaning that investors tend to flee other assets and flock to gold in the midst of economic or geopolitical turmoil.

Investors can take their pick of dustups fueling market uncertainty and driving up gold prices, from the federal investigation into Federal Reserve chairman Jerome Powell, to the U.S. military operation in Venezuela to the recent economic saber-rattling over a U.S. push to control Greenland, Nicky Shiels, head of metals strategy at commodities firm MKS PAMP, recently told CNBC.

“You’re entering a world where … there is a strong demand to secure critical metals, critical commodities in this decade,” she said.

Generally, investors can hold gold in one of two ways: physically in the form of coins or bars or through an exchange-traded fund or mutual fund which tracks the fluctuations in the metal’s price. Which approach is right for you depends on your reason for holding, says Mike Casey, a certified financial planner with AE Advisors in Alexandria, Virginia.

“I would reserve physical gold for no more than 5-10% of a diversified portfolio if you’re risk-tolerant, value sovereignty or anticipate prolonged instability,” he says. “Otherwise, stick to paper gold.”

It’s also smart to consult a trusted financial professional before making any changes to your portfolio.

Many investors favor gold during times of instability, as it has been considered currency for millennia.

Should something go seriously wrong with the financial system, such as a large-scale devaluation of the U.S. dollar, owning some precious metals could come in handy, says John Bell, a CFP with Free State Financial Planning in Highland, Maryland, adding that he typically advises clients interested in gold to own a mix of physical and “paper” gold.

“While I am not a doom and gloom person who thinks the apocalypse is upon us, I like the fact that gold and silver are outside the broad banking and financial services system,” Bell says. “For instance, you can access it any time if it is physical and take it to a local dealer to get money.”

Gold comes with a couple of other advantages during trying times, Casey adds.

“It eliminates counterparty risk,” he says, meaning you won’t have to rely on a mutual fund company or brokerage to give you your money. “[It] provides tangible ownership, and can serve as a privacy shield in uncertain times — think estate planning or cross-border mobility.”

There are some drawbacks to holding gold this way, however.

You’ll generally have to pay a premium over gold’s “spot” price (the price ETFs track) to own the physical stuff — often a 5% to 10% markup, Casey says — plus pay extra to store it somewhere, unless you’re comfortable stashing it under your mattress.

Plus, under normal circumstances, it’s much harder to sell your physical gold for cash than it is to click “sell” on your your gold ETF position in your brokerage account.

Even if you don’t have major concerns about geopolitics or the economy, there’s still a case to made for owning some exposure to gold, says Casey.

“Gold’s allure lies in its role as a portfolio diversifier,” he says. “It’s historically non-correlated with stocks and bonds, offering stability during market volatility or currency devaluation.”

In other words, the factors that drive gold prices are different than the ones that drive the returns on stocks and bonds, such as corporate earnings and interest rates. And as Casey points out, gold has maintained or grown in value during some periods of market turbulence.

In 2002, for instance, when theS&P 500 dropped more than 22%, gold rose by nearly 25%. Gold also posted a nearly 6% uptick in price in 2008, a year in which the broad stock market fell by 37%.

Of course, gold doesn’t move in the opposite direction as the stock market all of the time — 2025 was a great year for gold and a good one for stocks. But owning a mix of assets that perform differently under different conditions reduces overall volatility in your portfolio and generally provides a smoother ride, experts say.

To add “paper” gold to your portfolio, consider buying a mutual fund or ETF that tracks the change in the metal’s price. These funds are generally backed by a physical cache of precious metals and do an accurate job tracking the spot price.

The reason investing experts recommend keeping gold as a small portion of a diversified portfolio is that unlike other assets, such as stocks and bonds, gold doesn’t generate profits or throw off cash.

“It simply sits there, unchanged and unproductive, its value dependent on what the next buyer is willing to pay,” says Alex Canellopoulos, a CFP with Vista Capital Partners in Portland, Oregon.

“That doesn’t mean investors never benefit from rising gold prices,” he says. But he and other experts caution against making it a major building block of your portfolio.

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