Gold Investment People have been popular over the past few years, but interest has jumped more since its launch in 2025. In fact, the average position Price of gold The price is now over $2,900, which is excellent at the average of $2,600 starting the year.

Gold's ability to prevent inflationNot to mention it Diversified functions The potential for long-term price growth is just some of the reasons why investors flock to these investments. They are also popular during periods of economic downturns or uncertainty, where they may extend gold prices upward.

"As we begin to settle in 2025, gold prices have been soaring, reaching a new record due to the combination of short-term market forces and broader macroeconomic trends," said Joe Cavatoni, senior market strategist at the World Gold Council. The climax of the record. ”

Given the current economic uncertainty, we asked experts about this connection and where we can expect gold prices to rise this year.

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Gold prices and economic downturns: What investors should know

One of the reasons gold prices tend to grow during downturns is that “it only needs one place.”

"When the market crashes, when money rotates from stocks and bonds, and when cash rotates during inflation, it only takes one place to go," Boston said. "Because they are considered safe investments, it tends to tend to be," he said. in gold and silver.”

That "haven" Status often leads investors to focus on precious metals, while other asset classes grow increasingly — for example, when stock markets fall or real estate prices are shaking.

"The high price rise can point to a shift to a more cautious investment strategy as investors seek assets with reliable track record of retaining wealth during financial and political turmoil," said Ben Nadelstein, head of currency metal content.

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Gold responds to Fed's actions

Another reason gold prices tend to shift during challenging economic times is that the Fed tends to adjust its monetary policy more aggressively.

"When the recession occurred, the Fed took action to raise the price of gold," said Brett Elliott, marketing director at the U.S. Precious Metals Exchange (APMEX). "In the recession where the Fed cuts tax rates - most It's the price of gold that rises."

When the Fed lowers interest rates, the investments that earn interest are less attractive to consumers. They then seek alternative assets such as gold to help them grow money and protect their wealth.

For reference, the Fed lowered three times last year. As of now, CME Group's FedWatch Tools project may do this again later this year, perhaps at a meeting in June, July or September.

This is usually the time to reevaluate

Gold also tends to do a great job in challenging economies, because that is when consumers tend to take a step back and really evaluate their financial and investment allocations. They may want to transfer funds to other assets, or, in some cases, put extra cash into courses that can better protect their funds.

“The downturn often causes investors to reevaluate the fundamentals of their portfolios,” Nadlstein explained. “Gold’s long history as a safe haven and diversified asset can make it an attractive choice for times of uncertainty.”

The next step for gold

If you are focusing on gold investments, it may be time to buy, as experts largely predict Gold prices will continue to rise.

"Today, it's not just the U.S. central banks buy gold," Boston said. "Given the economic landscape and uncertainty today, we have central banks around the world buying gold at record levels. If gold was even in the 1980s Halfway through, when only the U.S. central bank bought gold, we could start a major rise in the gold market.”

Additionally, with the new president's administration of "uncertainty in monetary, fiscal and trade policies," Kavatoni said. This could allow more investors to enter a safe haven for gold, thereby further raising prices.

"By the end of this year, you can make a simple argument for $3,500 for $3,500," Boston said. "If we raise our ugly heads again in financial markets or inflation, this may make the price even more high."

Learn more about investing in gold during uncertain economic times here.