Investing in Gold: 10 Facts You Need to Know

Gold tends to do well in times of trouble.

Small gold nuggets in an antique measuring
(Image credit: Getty Images)

Gold tends to do well in times of trouble. Well, thanks to the coronavirus pandemic putting the global economy on lockdown, investors had trouble in spades in 2020, and that was evident in a nearly 25% return for the yellow metal last year.

However, gold prices have had a more difficult time in 2021, off about 8% year-to-date. But despite what should be a much better year for the economy than last, some investors still might be tempted to buy gold on this dip. After all, even after coming under pressure from higher interest rates and outflows from gold exchange-traded funds (ETFs), analysts think the outlook for the shiny metal remains bright this year.

Indeed, 38 analysts surveyed by the London Bullion Market Association forecast gold prices to average $1,974 an ounce in 2021. That's about 13% higher than current prices, and would represent a return to levels not seen since August 2020.

Just understand: Pouring a chunk of your assets into gold isn't always a good idea. In fact, gold actually has a spotty long-term record as an investment.

Here are some critical nuggets you should know about investing in gold before betting on the precious metal.

Data, prices and returns are courtesy of Kitco, DQYDJ, the Perth Mint, the World Gold Council, YCharts, the U.S. Mint and Morningstar.

Dan Burrows
Contributing Writer, Kiplinger.com