What makes gold a valuable investment today?
Gold is one of the oldest and most stable forms of investment. People have been using the precious metal as a store of value for thousands of years. Even today, many believe it makes sense to invest in gold to safeguard their wealth in the long term. Those who invest in gold are usually seeking security and long-term preservation of value – not short-term gains.
One reason for gold’s lasting importance lies in its unique characteristics:
Gold can't be created at will and the maximum supply is limited.
The precious metal is independent of currencies and not subject to inflation caused by monetary policy.
It doesn’t corrode, remains permanently valuable and retains its material worth.
Gold is recognised globally and has high liquidity.
Physical gold can be sold at any time, e.g. to banks or precious metal dealers.
Central banks around the world hold large gold reserves to safeguard their currencies and reduce their exposure to global risks. At the same time, many private investors view gold as a sensible way to diversify their wealth. While gold doesn’t generate regular income like interest or dividends, it offers long-term potential for value appreciation with less default risk than many other assets. So, investing in gold isn’t a decision for quick profits – it’s a choice for stability and value preservation.
Gold price at a record high in 2025: The continued popularity of gold is reflected in recent price trends. In April 2025, the gold price exceeded $3,500 per ounce for the first time, marking a new milestone. On 26 June 2025, it reached a daily high of $3,328.01, while the previous intraday all-time high stood at $3,498.69 (as of July 2025). In October 2025, gold climbed even higher, reaching a new record of $4,075 per ounce. These developments highlight gold’s ongoing strength and its appeal as a safe-haven asset amid geopolitical uncertainty and growing demand from central banks worldwide.
Gold as an investment for central banks and private investors
Gold is globally recognised as an asset class and is used strategically by both central banks and private investors. So, if you're thinking of investing in gold, you're not entering a niche market but following a globally established approach to wealth preservation. While central banks and private investors pursue different goals, they’re united by one principle: trust in the intrinsic value of gold.
Why central banks hold and buy gold
Gold has long been regarded as a stable store of value for nations. Many central banks around the world hold large gold reserves to secure their currencies and bolster economic stability. At state level, investing in gold is considered wise because it operates independently of currencies, interest rate policies and debt markets. This means that for central banks, gold is a strategic long-term investment – especially during financial market turmoil or rising geopolitical risks.
Reasons for building gold reserves at a glance:
Hedging against currency risks, especially in relation to the US dollar
Diversifying state assets across different asset classes
Protection against inflation and long-term loss of purchasing power
Preserving value over the long term, independent of interest rate decisions or market cycles
In recent years, global demand for gold has grown. Many central banks – including those in China, Russia and Turkey – have significantly expanded their reserves. For investors, this sends a strong message: if you're wondering whether it still makes sense to invest in gold, the fact that governments continue to invest in the metal long term can be taken as clear confirmation.
What factors influence the gold price? In addition to central bank buying, several economic and political developments affect the gold price:
supply and demand on the global market
exchange rate movements, especially with the US dollar
inflation expectations and monetary policy measures
interest rate levels – the higher the rates, the less attractive gold is compared to bonds
geopolitical crises such as wars, trade disputes or political uncertainty
performance of other asset classes such as shares or property
Reasons for private investors to invest in gold
More and more people are choosing to invest in gold – and for good reason. Whether as a long-term store of value, protection against inflation or a way to build a balanced portfolio, gold can be a smart addition for private investors looking to secure their wealth.
Here are a few arguments in favour of investing in gold:
Protection in times of crisis and inflation: Gold is seen as a "safe haven", especially when stock markets are volatile or economic uncertainty is high. In times of high inflation, gold can help preserve the real value of savings.
Value stability and scarcity: Gold is a physical precious metal with a limited global supply. It can’t be created at will like fiat money. This scarcity contributes to its reputation as a long-term store of value.
Portfolio diversification: Those looking to diversify across different asset classes can reduce overall risk with gold. Its price often moves independently of shares or bonds, making it especially attractive to long-term focused investors.
Independence from the financial system: Gold carries no issuer risk – it isn’t a promise from a bank or company. Investing in precious metals like gold means backing a globally recognised and tradable asset.
How safe is gold as an investment?
Gold is often referred to as a "safe haven", particularly in turbulent financial times. But how safe is it really?
Gold in times of crisis: trust during uncertainty
Those who choose to invest in precious metals like gold during tough economic times are following a principle that's stood the test of time. Gold has proven itself a reliable store of value in many historical crises, such as the 2008 global financial crisis, the 2020 coronavirus pandemic or the ongoing geopolitical tensions since 2022.
Protection against inflation and loss of purchasing power
A common reason why both individuals and central banks invest in gold is to protect against inflation. While traditional currencies can lose value due to high money supply and interest rate policies, gold's supply is limited. Investing in gold can help safeguard the real value of capital over time.
That said, gold isn't immune to short-term price fluctuations. If you're looking for an investment with absolute price stability, gold isn't it. Still, decades of data show that investing in gold can still be worthwhile today, especially as part of a balanced strategy.
Gold isn’t a cure-all – but it is a stabilising factor
Gold can't replace high-yield investments like shares or bonds. It doesn’t provide regular income such as interest or dividends. It’s not designed for short-term gains, but for long-term preservation of value. As a portfolio complement, gold can help balance volatility and spread risk.
How do investors best invest in gold?
Thinking about investing in gold and wondering how to go about it? There are two main ways, each offering a different path to adding gold to your portfolio.
Physical gold: Investors buy real gold bars or coins, which they store themselves or have securely held by specialist providers like Bitpanda Metals.
Digital gold: Investment is made via ETFs, ETCs or shares – in the form of securities or tokenised assets.
Investing in physical gold with bars and coins
Gold bars: These usually range from 1 gram to 1 kilogram in weight, with the price per gram decreasing as the bar size increases.
Gold coins: Popular investment coins like the Krugerrand, Maple Leaf or Vienna Philharmonic are easy to trade but often cost slightly more than their gold content.
Important when buying gold:
Look for certified dealers and a fineness of at least 99.50%
Compare prices and check authenticity using embossing or a certificate
If you don't want to store physical gold yourself, you can have it securely stored by a provider
Investing in digital gold with shares, ETFs and ETCs
Gold ETCs: These securities track the gold price directly, are often backed by physical gold and can be easily traded on the stock exchange – though they carry some issuer risk.
Gold ETFs: Pure gold ETFs aren’t available in Germany, as funds are required by law to be diversified. Similar products may be accessible abroad, but can involve additional tax and administrative obligations.
Stocks: With stocks, investors don't buy gold directly but invest in, for example, the performance of mining companies – which can result in greater price swings and higher risks.
