2. Uncertainty

When times are uncertain, investors are generally in “risk-off” mode. This means they take money out of the stock market and put it into “safe” assets like gold.

One can be uncertain about a multitude of things. Trade uncertainty, economic uncertainty, tax uncertainty, stock market uncertainty and geopolitical uncertainty. Let’s just take a look at the last few months. The Middle East conflict and the tariffs president Trump has threatened on trading partners has pushed gold to all time highs.

Gold protects investors’ portfolios when other assets underperform in uncertain conditions. Let’s have a look:

3. Fleeting trust in US assets

This is a relatively new driving factor of the gold price but one of the most important. 

Ever since the United States became recognised as the number 1 most powerful nation in the world since the end of World War 2, the dollar and US government bonds were known as “safe haven” assets. This is because the US is a rich nation and its currency is the reserve currency of the world. 

But, the US has abused their position as the number 1 nation by spending and borrowing irresponsibly. Their spending outstrips their income by $1.3tn and an estimated $3.3tn will be added to this over the next decade with Trump’s new tax cutting bill. Attacks on independent institutions like the Federal Reserve central bank and questionable economic policies like the “reciprocal” tariffs unveiled on April 2nd have injected doubt and fear over the “safe haven” status of US assets.

Gold, as a result, has filled this gap and is a large component of the rise in the price. In the eyes of investors, after centuries of civilization, you still can’t get any safer than gold. 

4. Devaluing currencies

Over time, fiat currencies (a currency not backed by gold) are worth less and less. In other words, 10 years ago £5 could buy you more than £5 today. 

A troy ounce (31.1g) of gold 10 years ago was £716. Today? £2,496. 

Unlike typical currencies, gold has not only maintained its value but it is worth 3.5x more. Safe to say that’s beaten inflation. 

Gold ensures the holder that the wealth you have today will maintain its purchasing power in the future. This is exactly why governments, institutional and retail investors love gold and have been buying more and more of it. 

5. Diversification

Diversification. What does this mean? In the context of investments, it simply means having a variety of assets that perform differently over a period of time. 

For example, imagine an investor who has £1mn. This investor put the whole £1mn into stocks. Then, in 2008 the financial crisis took place or in 2020 with the pandemic or in 2025 when Trump unveiled sweeping tariffs on trading partners. At each of these points, the investors portfolio would have been down at least 20 per cent. That’s £200,000 gone like that (snapping of the fingers). 

Now imagine that investor put £250,000 in collectibles, £250,000 in stocks, £250,000 in art, and £250,000 in gold. Over time, the £1mn portfolio is more resilient in the face of inevitable downturns and economic cycles. These inevitable cyclical downturns emphasise the need for diversification and greater awareness of this has been driving the price up over the years. 

How gold performed relative to US stocks in the past 25 years. 

What now?

So there we have it. 5 reasons why gold goes up in value. Most of us are not central banks and some of us may not have £1mn to our name. However, all of us don’t want to see our money be worth less in the future, all of us want to grow and secure our wealth, and all of us want to have money set aside for a rainy day. 

If only there was something that captured those three things and was affordable, portable and tax efficient. 

Oh wait, there is: Investment grade gold coins. 

Photo taken from Bullion House London Showroom.