A number of investors view gold as an asset that may help offset losses from other assets in their portfolio during periods of economic volatility.

The precious metal’s performance record lends credence to that notion. During the Great Recession, for instance, which took place between 2007 and 2009, gold prices rose 2.6% in 2008 and approximately 13% in 2009, according to the U.S. Bureau of Labor Statistics.

“The tried-and-true things that appeal to investors — [having] a guaranteed cash flow, or insulation against inflation — gold meets these requirements,” says Everett Millman, a precious metals specialist at Gainesville Coins. “It’s a safe play. Gold has steadily climbed in value and kept pace with inflation for thousands of years.”

Gold also, however, has been known to increase in price when the U.S. economy is expanding. 

Data from the Department of Commerce, for instance, showed gross domestic product — commonly regarded to be an economic indicator — grew at a 3.4% pace from October to December. The U.S. economy is currently still growing, as of April 10, at a 2.4% rate, according to the Federal Reserve Bank of Atlanta’s calculations.

In December 2023, spot gold prices rose to a new level, $2,135 an ounce. Gold’s price increased even more on March 21, 2024, reaching $2,222 per ounce.

In the first few days of April, gold climbed even higher, to $2,305.04, according to Reuters — and soon after reached another milestone, surpassing $2,365 on April 9. USA Today recently reported that as of April 10, gold has risen 13.17% this year in value.

“It’s unusual that the gold price would remain this high for this long because in past instances when gold reached an all-time high, it very quickly corrected,” Millman says. “It would sell off and come down 10% to 20%. That hasn't happened this time.”

Why You May Want To Consider Gold in 2024

Some investors may choose to include physical gold in their portfolio primarily because they feel it’s an asset that, as former Federal Reserve Chairman Ben Bernanke once said, can provide “protection against … really, really bad outcomes.” 

The precious metal may also be a beneficial inclusion, though, when the U.S. economy is robust. Purchasing it now could potentially pay off later if prices for the precious metal continue to rise.

Although traditionally, gold has often moved inversely to the U.S. dollar in the past — increasing in value when the dollar weakens and declining when the currency is strong — in 2022, the dollar appreciated more than 12%, and the annual average London Bullion Market Association price for gold reached a record average of $1,800 per ounce, according to a World Gold Council report.

Gold’s recent performance, Millman adds, has also diverged from its typical relationship to the U.S. dollar.

“The dollar is actually still rather strong against its peer currencies,” the Gainesville Coins specialist says. “Gold has maintained close to all-time highs, even in the face of that headwind — that’s one thing that would lead me to believe gold prices are going to be higher by the end of the year and going forward.”