When the stock market crashes and panic sets in, many people rush to buy gold as a safe-haven investment. After all, gold has been seen as a stable hedge against inflation and economic downturns for centuries. The theory that investing in gold is a wise practice during uncertain times has become so widespread that some call it the “gold bug’s dogma.” Gold is one of the most common secondary investments and a great way to mitigate risk during volatile market conditions.

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When should you invest in gold? Here are some guidelines for when it makes sense to invest in gold as part of your portfolio.

1. When the stock market is doing poorly

It’s not surprising that investors worry about the future of their retirement portfolio when the stock market dives. Many investors turn to gold as a hedge against economic uncertainty. In recent years, it has been shared that gold prices rise when the stock market dives and vice versa. The theory behind this phenomenon is that investors fear their savings will lose value in traditional investments like stocks. Hence, they buy gold instead to preserve their wealth and assets.

If you already have a 401k, it’s possible to do a gold 401k rollover.

2. When inflation rises significantly

Gold is often viewed as a hedge against incredibly high inflation rates. Gold is often considered an excellent way to preserve your wealth as inflation rises, so investors buy gold to keep their wealth stable. Many believe gold is a good inflation hedge because it has historically held its value in times of high inflation. In addition, because gold is often viewed as an investment that protects your wealth, some investors buy gold to protect themselves from high inflation levels.

3. Recognise the long-term upward trend

In the long term, gold has been steadily gaining value over time. Gold has increased in value from $35 per ounce in 1900 to more than $1,500 per ounce today. As a result of this long-term trend, many people believe that gold is a good investment for the long term because it will likely continue to rise in price and hold its value over time. According to recent research, gold has been the best-performing asset class over the past 20 years.

4. When the U.S. dollar is weak

Gold is often considered a haven in times of economic uncertainty because it is not tied to any one country or government. Many investors will buy gold when they are concerned about the value of the U.S. dollar and the strength of the U.S. economy. Many investors view gold as an excellent way to protect their wealth from the effects of a falling U.S. dollar, so they buy gold to hedge against a weak dollar.

5. When a country is experiencing political instability

In times of political instability, many investors buy gold to protect their wealth. For example, in 2008, when the global financial crisis was at its worst, many investors bought gold because they were concerned about the value of their investments and the stability of their banks.

6. When the U.S. Federal Reserve is printing money

The Federal Reserve has a long-standing history of printing money to stimulate the U.S. economy during hard times. When the Fed prints more money, it will often cause inflation, which can devalue your dollar and lead to a rise in gold prices. For example, in response to the Great Recession of 2008, the Fed printed trillions of dollars to help bail out the banks, which led to a considerable rise in gold prices.

7. When interest rates are meager

Many investors buy gold when interest rates are low to generate a better investment return. When interest rates rise, gold prices usually fall. For example, in 2013, the Fed announced that they would start tapering their quantitative easing program, which was expected to lead to higher interest rates and lower gold prices.

8. When there are geopolitical concerns

International tensions can cause gold prices to rise. For example, the Arab Spring protests in 2011 drove up gold prices as investors feared that the civil war in Syria would spread to other countries. The Ukrainian crisis of 2014 caused a lot of concern about the possibility of a military conflict between Russia and NATO, which also led to a rise in gold prices. According to recent research from the Bank of International Settlements, gold prices were up by about 4% in response to the conflict between Russia and Ukraine.


Gold is a great way to diversify your portfolio and can also be used as an inflation hedge. With that said, it is essential to remember that gold is another asset class, and its price movements can be just as unpredictable and volatile as the price movements of other assets. As such, investors who are considering adding gold to their portfolios should do so with caution.