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More Americans see gold as a good investment. Here's why.

Gold is becoming more popular for long-term investors as economic uncertainty grows. Getty Images/iStockphoto

If you've grown more concerned about the security of your investment portfolio this year, you're not alone.

Between inflation, rising interest rates and a potential recession, many investors are seeking stability. And now, the growing risk of the U.S. defaulting on its debt and potential economic fallout could leave even traditionally safe investments, like T-bills and bonds, with some added volatility. 

Increasingly, people are turning to gold.

A recent Gallup poll shows that the percentage of Americans who name gold as the best long-term investment option has nearly doubled since last year, from 15% to 26%. It's also second-most commonly named the best investment, trailing only real estate, according to the poll.

"Gold tends to be the beneficiary when confidence levels in both real estate and stocks are down," the poll report reads. "This is typically during times of economic recession or uncertainty, as happened around the time of the Great Recession, and is happening again today."

Experts are looking at gold increasingly positively, too. Strategists at the Wells Fargo Investment Institute recently upgraded their guidance on precious metals from neutral to favorable and even predict gold prices could move from around $2,000 to close to $2,500 in 2024.

Gold's long-term appeal when the economy is uncertain could explain why it may be growing more popular among investors today.

Learn more about your gold investment options with a free information kit.

Why Americans are turning to gold investing now

There are a few factors that make gold distinct from other investment assets and a good choice for long-term investors. Here's what to know:

You can diversify against losses

One of the best reasons to invest in gold is diversification. Gold's prices tend to move independently of other investment markets, which can help shield your money when those markets are volatile.

For example, 2022 was an overall negative year for the S&P 500, but gold prices actually saw a small increase. And today, even as uncertainty around the overall economic climate grows, gold prices are rising to near all-time highs. Some experts even believe the price of gold is still far from the peaks it could reach in this economic cycle.

On the other side of the coin, you don't want to put all your money into gold. While it's a safe haven, it doesn't have the growth potential of some riskier investment types. Dedicating a portion of your portfolio (experts recommend around 5%) to gold can help you get through periods of uncertainty and a volatile market, while still taking the opportunity to grow your investments over time.

Explore gold investment options available to you today with a free investors kit.

You can maintain purchasing power

Gold is also commonly viewed as a hedge against inflation

Not only are gold prices typically steady against other markets, but it also has an inverse relationship with the value of the U.S. dollar. As inflation drives the dollar's value down, gold prices tend to rise

This can be good for long-term investors; even if different inflationary periods limit your purchasing power elsewhere, the money you have invested in gold may remain steady or even rise in value. Especially if you're a beginner investor with a long time to invest, gold can bring some much-need stability for any economic environment the future may bring. 

The bottom line

If you're investing for the long term, you should expect an economic rollercoaster. The economy is constantly changing, which can make it difficult to predict how your investments will perform over time. The most important thing you can do is set yourself up to benefit from periods of growth while mitigating your losses when markets are more volatile.

In today's increasingly uncertain economy, gold offers long-standing stability and a counterbalance to volatility elsewhere — which is appealing to many investors. As the possibility of a recession remains and the consequences of a U.S. debt default are still up in the air, gold could be a good way to offset some uncertainty in your own portfolio.

Explore gold investment options today with a free investment guide.

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