Brad Rhodes: Should you invest in gold in 2025? Consider these pros and cons

By Brad Rhodes 

Gold has long been considered a store of value, but its role in a modern investment portfolio is a subject of ongoing debate. While some see it as a hedge against inflation and economic uncertainty, others view it as a volatile and unproductive asset. Understanding the pros and cons is crucial before deciding whether gold is right for you in 2025.

A brief history: The U.S. dollar was tied to gold for nearly two centuries until 1971 when President Nixon severed that link. Since then, the dollar has been a fiat currency, backed by the government rather than a physical commodity. This shift has arguably increased gold’s allure as a potential safe haven during times of economic instability.

Pros of owning gold:

1. Tangible asset: Gold is a physical asset you can hold and possess. Unlike some investments, it doesn’t rely on a company’s performance or a digital ledger. Its enduring nature is also appealing; gold doesn’t tarnish or degrade over time. It can also function as an alternative currency, used for trade or barter.
2. Aesthetic value: Gold’s beauty and desirability are undeniable. Gold jewelry remains a popular gift and a symbol of status and affection across cultures.
3. Perceived safe haven: Gold is often seen as a hedge against economic turmoil. When traditional investments like stocks and bonds falter, some investors flock to gold, driving up its price. This perceived safe-haven status can provide a sense of security during uncertain times.

Cons of owning gold:

1. Security concerns: Physical gold needs secure storage, whether in a safe, a bank vault or another secure location. This can be a source of stress and requires careful planning. The risk of theft or loss is a real concern, and insurance costs can add up.
2. Limited utility and no income generation: Unlike real estate or stocks, gold doesn’t generate income. It has minimal industrial use compared to other precious metals like silver or platinum. Its value is primarily derived from its perceived scarcity and its role as a store of value. You can’t rent it out like a property or receive dividends like a stock. Profit is only realized when you sell the gold at a higher price.
3. Hidden costs: The true cost of owning gold often goes beyond the purchase price. There are premiums to pay when buying, fees when selling, and ongoing storage and insurance costs. These expenses can eat into your returns and should be factored into your investment decision.

Should you own gold in 2025?

The decision to invest in gold is highly personal and depends on your individual circumstances, risk tolerance, and investment goals. If you’re primarily driven by fear of economic collapse or high inflation, gold might offer some comfort. However, if you have a longer investment horizon and are comfortable with market fluctuations, other investments might offer better growth potential.

How to invest in gold:

If you decide to invest in gold, it’s crucial to work with a reputable dealer. Consider purchasing gold coins or bars, which are often seen as a safeguard against scams. Do your due diligence, compare prices, and understand the associated costs before making any investment decisions. Consulting with a financial advisor can also be beneficial to determine if gold aligns with your overall investment strategy.

Brad Rhodes, a native North Carolinian, is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management. Syndicated Columnists is the sole provider of this material, both written and conceptual, for this column. All rights reserved.