Gold Price Surges 25% in 2025 Amid Inflation and Economic Uncertainty

The price of gold was trading at $3,389 per ounce as of 9:20 a.m. Eastern Time on July 21, 2025. This price remained unchanged from the previous day but represented a significant increase of $993 from the same period last year. The price of gold one month ago was $3,353, indicating a slight decrease of 1.06% from the current price.

Gold is often seen as a stable investment, particularly during times of economic uncertainty. It is not directly tied to inflation and is generally expected to increase in value over time. One popular method of investing in gold is through a gold IRA, which can provide a steadying force in a portfolio amidst volatile markets. This option is particularly appealing to those who wish to invest in gold without the challenges of storing physical gold bullion.

Historically, gold has not always been a high-performing investment. From 1971 to 2024, the stock market delivered average annual returns of 10.7%, while gold delivered an average annual return of 7.9% over the same period. However, during times of economic uncertainty, gold serves as a solid risk-averse investment and is often considered a store of value rather than a traditional investment like stocks and bonds.

The spot gold price, which is the price to buy or sell gold immediately in an over-the-counter trade, is an effective way for investors to monitor the demands and trends of gold investment at that time. A higher spot gold price indicates higher demand for gold in the marketplace. Unlike futures contracts, the spot price is for an immediate sale.

There are various factors that can impact the spot price of gold, leading to constant fluctuations. Investors need to be prepared to deal with this level of price volatility. The price spread in gold trading, which is the difference between the asset’s offered purchase price and the price offered to sell it, is another important consideration. The ask price is how much it costs to buy the gold, while the bid price is how much it can be sold for. Bid prices are always lower than ask prices. A smaller spread indicates a more liquid market and rising demand for gold.

Investing in gold can take many forms, including physical gold bars, coins, jewelry, futures contracts, and gold funds. Gold bars, often referred to as bullion, are a popular method of investing in gold and are offered on a per gram or ounce basis. Gold coins, such as the American Gold Eagle coin, are collectible and often sold at a higher price than bars of the same weight due to their limited availability. Gold jewelry comes with aesthetic and subjective value, making its price significantly higher than its standard weight value. Gold futures contracts allow investors to speculate on the price of gold in the future without handling the physical product. Gold funds, which are mutual funds or ETFs that own gold assets, provide another way to invest in gold.

Ultimately, the decision to invest in gold is subjective and depends on individual investment goals. However, using gold as a way to diversify an existing portfolio can mitigate the impact of market volatility. In the current economy, gold continues to offer stability in a highly volatile period for the stock market. Prices have risen to all-time highs, with the price rising over 25% since the start of 2025, fueled by ongoing inflation and economic uncertainty. Many experts agree that this is a good time to diversify a portfolio with gold.

Other precious metals, such as silver, platinum, and palladium, are also popular investments. Gold is typically less volatile than silver, which can have a large price range even within a 24-hour period. Silver is more sensitive to external economic changes due to its widespread use across different industries. Platinum and palladium are also subject to significant price fluctuations, making them suitable for portfolio diversification but requiring caution due to their volatility.

The U.S. economy has been in flux for several years, and the current period of extended inflation has had a major impact. Gold can serve as an inflationary hedge in an investor’s portfolio. Additionally, because of the variety of acquisition methods, gold can be a relatively easy asset to accumulate based on an investor’s comfort level and interest. Whether purchased as an IRA or as a more active investment account, investing in gold may help achieve both short- and long-term investment objectives.