It’s been said that the only man who got rich during the California Gold Rush was the guy selling the shovels.
Nevertheless, people love the glittery stuff and will shell out plenty of dough to get their hands on it, especially now as gold prices are powering to record highs in light of tariff threats and economic uncertainty.
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“People don’t have typically adequate amount of gold in their portfolio,” Ray Dalio, founder of the investment management firm Bridgewater Associates, told CNBC during a Feb. 13 interview.
“When bad times come, gold is a very effective diversifier,” he said. “I think that having something in the vicinity of 10% or maybe a little more — 10% to 15% — in the portfolio is worth giving some thought to.”
Gold has been the subject of song and story since forever, as humans have reveled in such tales as the Golden Fleece, King Midas, El Dorado and Rumpelstiltskin.
Related: Gold price eyes $3,000 as bullion surges on Trump tariff risks
And last we checked, Neil Young was still “searching for a heart of gold,” which means he must be getting mighty old by now. And pretty tired.
A ranking of top James Bond villains put Auric Goldfinger, the eponymous bad guy of the 1964 flick, in the number 4 position.
This was one seriously twisted Individual whose butler killed people with his hat and who was bent on irradiating the contents of Fort Knox, the site of the U.S. Bullion Depository.
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Elon Musk concerned about nation’s gold supply
But at least Shirley Bassey belted out a Top 40 song about him, so there’s that.
And speaking of Fort Knox, there has been some concerns in very high circles that all that glitters may or may not actually be in the Kentucky-based military installation.
President Donald Trump told reporters on Air Force One that Elon Musk, whose Department of Government Efficiency is chainsawing its way through federal employment rolls, that the Tesla (TSLA) CEO would be looking at the legendary depository for American gold reserves.
And why, pray tell?
“To make sure the gold is there,” Trump said, according to the Associated Press. “If the gold isn’t there, we’re going to be very upset,”
Musk has spent days posting about this most pressing issue.
“Who is confirming that gold wasn’t stolen from Fort Knox?” the world’s richest man said on the social-media platform X, which Musk bought for $44 billion.
“Maybe it’s there, maybe it’s not,” he added. “That gold is owned by the American public! We want to know if it’s still there.”
“LIVESTREAM IT,” someone commented and got a two-fire emoji response from Musk.
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Treasury Secretary Scott Bessent assured the public that no one has made off with America’s lucky charms.
“We do an audit every year,” Bessent said. “All the gold is present and accounted for.”
He added that he would be happy to arrange an inspection for any senator who is interested. No word yet on who’s buried in Grant’s Tomb.
“I wonder when they find the vault depleted, if they blame Auric Goldfinger or Bob Menendez?” TheStreet Pro’s Doug Kass asked, referring to the former senator (D-New Jersey) who was convicted on corruption charges for, among other things, illicitly accepting gold bars.
“Is the price of gold going to rip after this one?” Kass mused in his Daily Diary.
The price of gold has been ripping right along on its own, hitting a record on Feb. 11 and then doing it again on Feb. 20, where it was at $2,959 an ounce at last check, up 47% from a year ago.
This activity has motivated Goldman Sachs analysts to boost their year-end price target for the precious metal 7.3% to $3,100 an ounce from $2,890.
Goldman cites tariff escalation for gold-target boost
“We think that central bank demand for gold will structurally remain higher,” Daan Struyven, co-head of Goldman’s global commodities research, said on CNBC’s Squawk Box.
“I think that [emerging markets] central bank reserve managers in mid-2022 got a wakeup call when they saw that Russian central banks’ reserves got frozen and are wondering are Treasurys are necessarily always risk free?” he added.
Western countries moved to freeze Russian central bank funds days after Russia invaded Ukraine in February 2022.
In 2024, central banks bought 1,045 tons of gold, which was the third-largest expansion of gold reserves on record.
Related: Why physical gold is your best bet against market chaos
The fourth quarter was a record breaker for central bank gold purchases, with 332.9 tons of gold added.
Struyven also called gold a great hedge against tariff escalation, which is important now given that Trump has said that as early as April 2 he plans to impose tariffs of around 25% on imports of autos, semiconductors, pharmaceuticals and lumber shipped to the U.S.
The investment firm estimated that structurally higher central bank demand will add 9% to the gold price by year-end
However, Goldman strategist Lina Thomas said in a research note that if policy uncertainty — including tariff fears — stays high, “higher speculative positioning for longer could push gold prices as high as $3,300 an ounce by year-end.”
A few words of caution about investing in gold
But before you go packing up the mules or stalking leprechauns, a few words of caution.
While investors often see gold as a haven during periods of uncertainty, it ain’t necessarily so, Barclays warned, as all sorts of factors can have an impact on its price.
These include supply and demand, the state of the global economy, and political uncertainty, all of which mean gold can be a highly volatile investment, the bank said. It advised investors to seek professional financial advice.
Carley Garner, a futures and options broker with DeCarley Trading, warned in her TheStreet Pro column that selling physical gold could be a challenge.
“Those holding gold ETFs, futures, or miner shares won’t have a problem offsetting positions, but if you are the type who prefers to acquire gold in a tangible form, you might find that the market is far less liquid than assumed.”
Related: Analyst revamps gold and silver outlook ahead of 2025
Selling a gold bar can be quite tricky, Garner said.
“Depending on the buyer, you will probably need documentation to prove ownership and an assay certificate of authenticity (as you can imagine, there are a lot of scammers out there),” she said. “Finding a buyer is problematic even after proper quality and ownership checks are completed.”
For the sake of liquidity, convenience, and price efficiency, Garner said, the best way to participate in the long side of gold is via the futures market.
“There is an opportunity to buy or sell 23 hours per day, five days per week, with minimal price slippage,” she said.
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