Should you still invest in gold when record high gold prices show no signs of reversing?

A golden run for the popular precious metal has sent it soaring to record highs, and investors seeking a slice have several options.

Gold’s record-breaking run shows no signs of slowing as geopolitical and financial chaos envelope the globe, but is it too late for investors to join the party?

The precious metal has surged almost 60 per cent higher over the past few years, currently trading above $US3100 an ounce, and projections for its potential future path range from $US3200 to $US4500.

Fears of global trade wars sparked by Donald Trump’s tariffs, and real wars in Europe and elsewhere, are spooking financial markets and pushing people toward gold, the ultimate safe haven.

This has combined with central banks across the world stockpiling gold bullion to reduce their reliance on US dollars.

Gold has historically copped criticism for not paying an income as shares, cash and bonds do, but as a simple store of wealth it has trebled in value in the past decade. However, nobody wants to buy at the top.

The gold price has gone up as other assets struggle. Picture: iStock

US investment giant Goldman Sachs has forecast gold to reach $US3300 by the end of the year, but says there’s a low-probability scenario where it rises to $US4500 within the next 12 months.

Bell Direct market analyst Grady Wulff said investors worried about geopolitics and global economic growth were attracted to traditional safe haven assets such as gold, and “the foundations are there for gold to keep running”.

“There’s a lot of drivers out there and there’s also a lack of high-grade supplies right now into the future,” she said.

Ms Wulff would not forecast a price peak, but said most analyst forecasts were for $US100 or $US200 above current levels. Another 60 per cent climb was unlikely because “it’s all factored into the market now and all the uncertainty is peaking”.

Most investors get exposure to gold through buying bullion directly, exchange traded funds that track the gold price, or owning shares in goldminers.

Ms Wulff said some goldminers were paying dividends, and “ETFs are running pretty hot as well”.

The best gold stock performer over the March quarter have been West African Resources which surged 62 per cent, followed by Regis Resources up 54 per cent.

IG market analyst Tony Sycamore said Goldman Sachs has upped the likelihood of a US recession from 20 to 35 per cent.

“Tariffs have come in much faster than everyone expected, with a lot of flip-flopping creating uncertainty,” he said.

“US trade policy is creating a lot of disharmony.

Bell Direct market analyst Grady Wulff. Picture: Supplied

“Gold can continue to push higher. It could be $US3200, it could be $US3500. There’s no reason why it can’t go to $US4000 if the uncertainty continues and drives the US economy into recession.”

Mr Sycamore said while gold company shares had boomed recently, buying gold ETFs or spot gold were the purest play, and did not come with company risks such as credit, hedging, production issues, strikes and floods.

Capital.com senior financial market analyst Kyle Rodda said gold had “major tailwinds” caused by uncertainty around trade wars, geopolitics and recessions. He said central bank gold-buying was showing up in data, and he could not see the trend reversing.

“If the US is buying less stuff from overseas, there’s less US dollars that need to be parked somewhere else by its trading partners,” Mr Rodda said.

“Investors want to get exposure to gold and demand is very high at the moment.”

Mr Rodda said it was difficult to say how high gold could go. “With all things considered, you are looking at $US3500 as being the level everyone is talking about – $US3000 was the big milestone and now everyone’s talking about $US3500 as the big milestone.”

Originally published as Should you still invest in gold when record high gold prices show no signs of reversing?