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Safe-Haven Investment Appeal
As the conflict in the Middle East disrupts global markets, gold is once again capturing interest as a viable safe-haven investment. This precious metal is typically regarded as a means of diversification and a store of value during uncertain times. Nevertheless, it’s crucial to understand what you are investing in and the reasons behind it before making any commitments. “Gold might be one avenue to hedge against geopolitical turmoil, but there are certainly other options,” such as investments in global energy and defense sectors, noted certified financial planner Barry Glassman, founder and president of Glassman Wealth Services in Vienna, Virginia, and a member of the CNBC Financial Advisor Council. “It will be fascinating to observe which segments of portfolios withstand this period of volatility.” The report highlights the impact of geopolitical events on gold prices.
The value of gold has been experiencing a significant increase lately. Bank of America anticipates that gold prices could hit $6,000 per ounce within the next year.
The price of gold has surged in recent days, driven by the intensifying conflict in the Middle East following the coordinated U.S.-Israeli military actions against Iran, which prompted retaliatory strikes on Israel and other U.S. allies in the Gulf region. Spot gold increased by 2.9% to surpass $5,400 an ounce before stabilizing in the $5,300 range by Monday afternoon.
Diversification Strategies
Although it has decreased from its peak of $5,594 on January 29, analysts believe that the gold price still holds potential for growth this year. In a recent research note, J.P. Morgan indicated that “surges in gold driven by conflict are temporary, yet geopolitical tensions are expected to persist,” which supports their prediction of gold reaching $6,300 by the end of 2026. Certified financial planner Patrick Huey, owner and principal advisor at Victory Independent Planning in Naples, Florida, remarked, “The market often signals which asset classes may be favorable during economic downturns and global instability.” He added, “As long as global turmoil continues, I believe gold will perform well.” So far this year, gold has risen approximately 23%, and it experienced a remarkable 64% increase in 2025, compared to the S&P 500’s gain of 16.4% last year. This price increase has been linked to various factors, including heightened demand from central banks and individual investors. Notably, JPMorgan has raised its long-term gold price forecast to $4,500 per ounce.
Ways to include gold in your investment strategy are essential, especially as the gold price recently reached a one-month high on Monday.
Huey emphasized the importance of understanding that investing in gold does not guarantee profits. “Gold has experienced extended periods of stagnation and times of significant volatility,” he noted. “It’s entirely possible to incur losses when investing in gold.” Many financial experts advise limiting alternative investments, including gold, to a minor portion of your overall portfolio. Huey maintains that alternatives should comprise about 5% to 10% of client portfolios. A number of investors prefer to invest in gold via exchange-traded funds instead of purchasing physical gold, which requires storage. ETFs allow investors to gain exposure to the valuable metal without the need to own it physically. Like all ETFs, they are traded throughout the day like stocks. Most of them are passively managed, tracking an index and its performance, for better or worse. Recently, gold surged to a one-month high on Monday.
Geopolitical Turmoil and Markets
Gold ETFs can have varying tax implications. Recently, gold surged to a one-month high on Monday.
There are several types of ETFs that provide exposure to gold, and it’s important to understand their tax implications. Some ETFs invest directly in gold bullion, like SPDR Gold Shares (GLD). Each share of the ETF corresponds to a specific quantity of that physical gold. If you purchase one of these ETFs through a taxable brokerage account, be mindful that any profits from selling may be taxed differently than gains from other assets such as stocks and bonds, according to Huey. Short-term capital gains—profits from assets held for a year or less—are subject to ordinary income tax rates, which vary from 10% to 37%. However, even if you retain your gold ETF for over a year, the usual long-term capital gains tax rates—0%, 15%, or 20%, based on your income—do not apply, as Huey noted. Instead, the IRS classifies gold as a collectible, which incurs a maximum tax rate of 28%. This is true even when investing in gold via an ETF. Investors in higher tax brackets will find themselves paying this rate. Recently, JPMorgan raised its long-term gold price forecast to $4,500 per ounce.
