Lately, gold has been everywhere. Rising prices, headlines calling it the "ultimate safe haven", and plenty of chatter about whether now is the time to add a little sparkle to your portfolio.
At Pearler, we love unpacking big investing trends like this. But when it comes to actually building wealth, we still believe in keeping things boring and simple. For most investors, low-cost, diversified ETFs are usually the most sensible foundation. Gold can play a supporting role for some people, but it is rarely the main act.
So let us take a calm look at where gold fits, how you can invest in it, and how to keep your long-term plan front and centre.
Why some people love gold
Gold has a reputation as:
- A store of value when markets get shaky
- A hedge against inflation
- A way to diversify away from shares and property
- A defensive asset that has been around for thousands of years
Those ideas are not completely without merit. Gold often behaves differently to shares, which is why some investors see it as a way to diversify. It can sometimes hold its value when other assets are falling, and it is widely recognised across the globe.
But that is only half the story. To understand where gold fits, you also need to look at what it does not do.
What gold does and doesn't do
Here is a quick comparison between gold and productive assets like shares.
Gold:
- Doesn't produce income
- Doesn't grow earnings
- Doesn't reinvest profits
- Doesn't compound on its own
Shares and share-based ETFs:
- Represent ownership in real businesses
- Can earn profits and pay dividends
- Can reinvest earnings to grow over time
- Can compound as companies build value
This is why long-term investors like Warren Buffett have often been lukewarm on gold. When asked how he thinks gold will perform in the future, he stated a bar of gold "will not do anything between now and then except look at you". In contrast, a group of productive companies can innovate, employ people, grow, and pay dividends for decades.
It’s a simple idea: it is usually better to own a goose that lays more eggs over time than one that just sits there and needs storage and insurance.
Gold can still be useful as a defensive or diversifying asset but it’s just not built to be your main long-term growth engine.
How gold fits in your portfolio
We like to think of your portfolio as a team.
- Shares are your growth players, they are the ones running up the scoreboard over the long term.
- Property can add some tangibility and stability.
- Cash plays backup when life throws curveballs.
- Super quietly works away in the background, building your future.
Gold? If you include it, it is more of a steady reserve. It will not power your returns, but it might help smooth things out when the market gets choppy.
Why do some investors hold gold?
1. Diversification
Gold tends to behave differently to shares and property. When markets fall, it sometimes holds its value, or even rises. That makes it a potential buffer during rocky periods.
If you are new to diversification, we have a quick breakdown here:
👉
How do I create a diversified portfolio?
2. Defensive qualities
Gold has a reputation for holding its ground during uncertainty. That is why it is often called a "safe haven" asset. It is scarce, physical and recognised globally, and its value is not tied to the profits of a single company or the decisions of one government. That makes it feel like a fallback when sharemarkets are falling or headlines are worrying.
3. Store of value
Gold has been around for thousands of years and is still valued globally. That long history is part of what makes it feel reassuring when everything else feels up in the air.
But here is the trade-off: gold does not produce income or grow in value on its own. It does not reinvest earnings or generate dividends. So while it might help steady the ship, it is not what gets you to your financial goals fastest.
Think of it as a support player, and generally not the main act.
How you can invest in gold
You no longer need to stash bullion under your bed (please do not).
Today, most everyday investors access gold via ETFs, exchange traded funds listed on the ASX. These ETFs track the price of gold, and you can buy and sell them through a regular brokerage account.
Here are a few examples:
-
QAU
BetaShares Gold Bullion Currency Hedged
Backed by physical gold and hedged for currency movements between the AUD and USD.
-
GOLD
Global X Physical Gold
Tracks the performance of gold in Australian dollars, backed by physical bullion.
-
PMGOLD
Perth Mint Gold
Focuses on gold commodities and tracks the international price of gold in AUD.
👉 View PMGOLD on Pearler
These products give you exposure to gold without having to store the metal yourself.
You can also learn more about the differences between gold and ETFs here:
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ETFs vs Gold: Which Is Right for Me?
Recent growth, hype and your portfolio
If you feel like you are seeing gold everywhere, you are not imagining it.
In 2024 the gold price hit a string of new record highs and finished the year more than 20% higher than 2023, helped by strong buying from central banks and investors. In 2025 it has pushed even higher again, setting fresh records as markets reacted to interest rate expectations, inflation concerns and geopolitical tension.
That kind of run naturally creates headlines, social media buzz and the fear of missing out. It can be tempting to think gold has become the main thing you should own and to shift a big part of your portfolio into it.
From a diversified portfolio point of view, though, big rallies can be a reminder to slow down, not speed up:
- Prices that have already risen a lot can be more volatile, which can be stressful if you are not ready for sharp moves in both directions.
- If gold has jumped faster than your other investments, it might already be a bigger slice of your portfolio than you planned.
- Chasing what has just gone up can pull you away from a simple mix of growth assets, defensive assets and cash that actually matches your goals.
A more measured approach is to decide what role, if any, gold should play in your long term plan, then keep it to a small, deliberate slice of a broader, diversified portfolio. You can then rebalance from time to time so that gold does not quietly grow into the main act just because it has had a strong run.
That way you can acknowledge the recent growth without letting the hype decide your risk level for you.
So... should I invest in gold?
Gold can serve a purpose, but it's not essential.
Here is a short checklist to help you decide if it fits your plan:
- Are you looking to diversify your portfolio further?
- Does holding a defensive asset help you stay invested during market dips?
- Are you comfortable not receiving income from that part of your portfolio?
- Do you understand how it fits alongside your other assets ?
And most importantly, are you making the decision based on your goals, or just reacting to headlines?
If a small allocation to gold helps you stay the course, that's completely valid. But if you are still building your base, we would suggest getting comfortable with diversified, low-cost ETFs first.
👉 How do I know what my risk tolerance is?
What gold can't do
This is the part that often gets lost in the hype.
Gold won't pay you dividends, reinvest profits, grow earnings over time or have compounding growth.
That doesn't make it bad, it just means it behaves differently. Gold can act as a safety net, especially during uncertain times. But it is not designed to build wealth the way productive assets like shares can.
If your portfolio is already diversified and you are on track toward your goals, adding a small gold ETF might offer some psychological comfort.
Just do not mistake comfort for performance.
What we think
At Pearler, we are long-term, boring on purpose investors.
Gold can shine in certain environments, but it does not drive long-term compounding in the same way that investing in businesses can.
If gold helps you sleep better, then that’s great. But for most investors with long time horizons:
Boring ETFs build futures.
Resources And Further Reading
- ASIC Moneysmart: Exchange traded funds (ETFs)
- ATO: Restrictions on SMSF investments
- Pearler: Investing for beginners
- Pearler: How do I create a diversified portfolio?
- Pearler: How do I know what my risk tolerance is?
- Pearler: ETFs vs gold, which is the right investment for me?
- Pearler: Is physically owning gold a good idea?
- Pearler: Managing investment risk in volatile markets
- Perth Mint: Invest in gold and silver
Disclaimer:
This article is general information only. It does not take your personal circumstances into account. Before making any investing decisions, consider chatting with a licensed financial adviser.
