Why Investing in Gold Is Still a Smart Move in 2026
Introduction: Why Gold Matters Now More Than Ever
Hey there! If you’ve been wondering whether gold is still a good investment in 2026, you’re in the right place. I’ve been stacking physical gold and buying gold on the stock market, and I want to share with you why I do it, how I think gold will perform, and what to watch out for.
Let’s dive into the real reasons behind investing in gold, why it’s more about preserving wealth than making a quick buck, and how central banks around the world are influencing this shiny yellow metal’s future.
Understanding Gold: Not Just an Investment, But a Store of Value
What Is Gold to Me?
When I say I’m investing in gold, I want to be honest: I don’t really see gold as a traditional investment. Investing means putting money into something hoping it grows. Gold? It’s more of a store of value, a way to keep your wealth safe over the long haul.
Gold won’t make you rich overnight. It won’t pay dividends like stocks or rent like real estate. But it preserves your purchasing power, especially when inflation is eating away at the value of cash.
Gold vs. Inflation: The Ultimate Hedge
Inflation is that sneaky thief that slowly erodes your money’s value. Imagine this: In 1980, you could buy a median-priced home in the US for about $70,000. At that time, gold was roughly $614 per troy ounce. It took about 114 gold coins to buy that home.
Fast forward to 2025, and the median home price is around $400,000, with gold at about $3,400 per ounce. Guess what? You now need about 117 gold coins to buy the same home. Despite inflation, gold has helped preserve the same purchasing power over 45 years.
So, if you’re buying gold, you’re not trying to “get rich”; you’re protecting your wealth from inflation.
Why Central Banks Are Driving Gold Demand
The History and Trust in Gold
Gold isn’t a new player. Civilizations have trusted gold for over 5,000 years—from Egyptian pharaohs to Roman emperors. This historical trust is why gold remains a crucial part of central bank reserves worldwide.
Central Banks Are Loading Up on Gold
Here’s the big deal: Central banks aren’t buying crypto or silver; they’re buying gold in record amounts. Since the Global Financial Crisis (GFC), central banks have been net buyers of gold for 15 years straight. The last few years (2022, 2023, 2024, and into 2025) have seen even heavier buying.
Why does this matter? When central banks buy gold, demand goes up, and so does the price.
The Shift Away from the US Dollar
Central banks’ reserve compositions show something important. The US dollar used to make up about 60% of global reserves in the early 2000s. Now, it’s down to 46%. Gold is now the second-largest reserve asset, with the euro and a mix of other currencies filling out the rest.
This trend is called ddollarization—countries and banks diversifying away from the US dollar, partly because gold is seen as a safer haven.
How Much Will Gold Price Rise? It Depends on the Dollar
It’s Not Gold Going Up, It’s the Dollar Going Down
When people ask, “How much will gold rise?” the better question is: How much will the US dollar lose value?
Gold is priced in dollars, so if the dollar weakens, gold’s dollar price goes up. If you hold 117 gold coins today, you can buy a median-priced home. In 30 years? Unless something drastic changes, those 117 coins should still buy that home, even if the dollar’s purchasing power has diminished.
Inflation Scenarios and Gold’s Future Price
If inflation runs at a modest 8% annually (which many people believe is more realistic than the official 2-3%), gold’s price could double from $3,400 to around $7,140 in 10 years.
And that’s just inflation. Other factors could push prices even higher:
- Central banks buying more gold
- Institutional investors increasing demand
- Potential gold revaluation events
When to Sell Gold: The Exit Strategy
Selling Gold Means Fiscal Responsibility
My personal rule: I’ll sell my gold when the US government learns to balance its budget. Why? Because balanced budgets mean less money printing, which means less inflation and less need for a gold hedge.
Will this happen anytime soon? Honestly, it’s unlikely before a major economic meltdown forces it. But it could happen someday.
The Downsides of Owning Gold
Physical Gold: Security and Storage Challenges
Owning physical gold sounds great, but there are some real issues:
- Risk of theft or robbery
- Storage fees if you use a secure vault
- Accessibility problems if stored offsite, especially during crises
- Insurance costs to protect your holdings
These are the “costs” of peace of mind when it comes to physical gold.
Gold on the Stock Market: Risks of Manipulation and Confiscation
Buying gold through ETFs or stocks is convenient, but it has risks too:
- Potential government confiscation, especially targeting ETFs rather than physical gold in private hands
- Market manipulation risks
- Dependence on the company’s or ETF’s management and security
These risks might sound far-fetched but are worth considering.
Gold Doesn’t Produce Income
One common complaint is that gold doesn’t generate income like dividends or rent. However, I’ve found a workaround: writing covered calls on gold stocks to generate income, which can beat bank interest rates while holding the asset.
Physical Gold vs. Gold Stocks: Which Is Better?
Pros and Cons of Physical Gold
- Tangible, direct ownership
- No counterparty risk
- Security and storage concerns
Pros and Cons of Gold Stocks or ETFs
- More liquid and easier to buy/sell
- Can generate income via strategies like covered calls
- Risks of manipulation or confiscation
My Approach: A Mix of Both
I personally own both physical gold and gold on the stock market (ticker GLD). If you’re new, stick to buying gold ETFs rather than gold mining stocks unless you’re an expert in mining operations and financial analysis. Mining stocks can underperform even when gold prices rise, which can be frustrating.
Key Takeaways: Why Gold Still Deserves a Place in Your Portfolio
- Gold is a store of value, not a get-rich-quick investment.
- It protects your wealth against inflation and dollar devaluation.
- Central banks’ growing appetite for gold supports its price and trustworthiness.
- Gold ownership comes with security and liquidity trade-offs depending on how you hold it.
- Diversification remains key—don’t put all your eggs in the gold basket.
Wrapping It Up: Should You Invest in Gold?
If you want a safe, time-tested way to preserve wealth and hedge against inflation, gold should definitely be part of your financial strategy. But remember, it’s not about making a fortune fast—it’s about keeping what you have safe for the long haul.
And hey, if you liked this breakdown, drop a comment or subscribe for more no-nonsense investing insights. Stay smart, stay diversified, and keep stacking that gold!
FAQ
Is gold a good hedge against inflation?
Yes, gold has historically preserved purchasing power during inflationary periods.
Should I buy physical gold or gold ETFs?
Both have pros and cons. Physical gold is tangible but needs secure storage; ETFs are liquid but carry different risks.
How much gold should I own?
It depends on your portfolio, but many experts suggest 5-15% as a hedge.
Will central banks keep buying gold?
Current trends and surveys suggest yes, central banks plan to increase gold reserves.
Feel free to use this as your guide to understanding gold investing !
