Amid economic concerns in the U.S., gold prices are hitting record highs. Does that mean that people should sell their stores? Dr. Tim Nash, an economist and director for the McNair Center at Northwood University, joined Audacy this week to explain the recent spike.
“Historically people have looked at gold as the ultimate investment,” Nash told WWJ Newsradio’s Ryan Wrecker. He added that “most investors are told to have at least between 5% and 10% of their investment portfolio in gold because of its rate of return and its store of values properties.”
Reuters reported Wednesday that its quarterly poll of analysts indicates that the average annual gold price is on pace to be “above $3,000 for the first time,” citing “global trade friction and a swing away from the U.S. dollar powering demand,” in the precious metal. Additionally, the World Gold Council found that total first quarter gold demand was the highest since 2016, citing U.S. tariffs, geopolitical uncertainty, stock market volatility and U.S. dollar weakness as factors.
“Spot gold prices have risen by a quarter so far in 2025, almost equaling the 27% increase recorded for the whole of 2024,” said Reuters.
Nash explained that gold is such a sought-after investment in part due to its industrial uses, including its use in jewelry and technology. Furthermore, there is a finite supply of gold.
“I would say that about 40 percent of the price of gold is that it’s a good investment, and it’s good investment against economic turmoil,” said Nash. “And it’s just a good investment relative to its industrial use, including jewelry as an industrial use.”
Nash said another 40 percent could be attributed to concerns about economic stability in the U.S. and around the globe.
“There’s concern about the United States as at the top of the heap in the global economy. And if you look then at the number of crises we’ve had – we’ve had 9/11, we had a great recession, we’ve had the COVID-19 recession. Today, we’re worried about the Middle East, we’re worried about Ukraine, Russia, we’re worried about the Taiwan straits between China and Taiwan.”
According to Nash, these crises have all worked to increase the value of gold for the past 25 years. While gold prices have risen overall, Nash also noted that they have skyrocketed since President Donald Trump has taken office and began announcing tariffs. At the same time, the stock market has fallen.
“So, there is concern about what is, is happening and probably the greatest concern other than a military conflict would be the fact that the U S national debt is, uh you know, roughly at $37 trillion and growing, and it’s something that we need to get under control,” Nash told Wrecker.
He also said that gold has an investment quality to it in and of itself, an innate quality for investment as well as being a hedge, and that's what makes it so unique,” indicating that its likely a good investment to hang on to, even as prices go up.