Why buy gold in 2025?

For gold investors, it would be hard to beat 2024. Amid a perfect storm of geopolitical uncertainty, interest rate cuts and central bank demand, gold prices rose over 25%.

But the ‘gravy’ of stellar growth isn’t the key reason investors buy gold. It is variously used as an inflation hedge, a safe-haven asset, a volatility hedge and portfolio diversifier, and all these motivations will come into play in 2025.

So, what could motivate you to buy gold in 2025?

Gold has been a store of value for millennia. Its durability, scarcity, aesthetic appeal and historical role as currency ensure it continues to hold its value today.

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Unlike fiat currencies, gold retains its purchasing power during inflation or currency devaluation. And its stability during market volatility makes it a preferred choice for wealth preservation and portfolio diversification in uncertain times. 2025 is likely to include some or all of those motivations.

A historic global currency

Gold’s rarity and immutability are the key reasons behind its abiding value. It is estimated that over 200,000 tonnes of gold has been mined throughout all human history, which sounds like a lot but would actually only fill between three and four Olympic swimming pools when melted down. The World Gold Council estimates there are only around 50,000 tonnes of proven reserves left in the ground.

This rarity underpins its value, and gold has been traded as a form of currency for thousands of years. In fact, seventeenth-century goldsmiths were responsible for creating the banking industry as we know it today. Central banks and countries are duty-bound to hold a certain percentage of their wealth in gold, in order to protect themselves from financial risk.

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A powerful asset for the future

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Buying gold is a great investment for the long term and remains the best performing asset of the 21st century, rising almost 1123% since 2000*. Central banks are buying up gold to shore up reserves, and demand remains well-balanced and on a long-term upward trajectory.

Gold investment is a safe haven asset that can protect your wealth for the future.

*Compared to UK house price index, 10-year government bonds, the FTSE 100 total return, and cash ISA interest rates.

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Reasons to invest in gold

£2,819,173,219,402

THE UK GOVERNMENT DEBT TOTAL

Market uncertainty

Markets are inherently volatile, and there are many potential catalysts for instability. Chief among these is the change in the US government administration, which always comes with policy change, but under Trump these changes may be more unexpected. He has already signalled a shift in international trade policy which is likely to create winners and losers, a recipe for volatility and uncertainty in global markets.

Gold can act as a counterpoint to uncertainty in an investment portfolio. As a safe-haven asset It often rises in value when other assets are falling as investors choose to load up on the precious metal during volatile times. Which is why even when markets are calm, holding a percentage of assets in gold can be a prescient hedge against this market uncertainty.

Compared to savings

Central governments around the world raced to raise interest rates in 2024 to stem the tidal wave of inflation. It has largely worked. Inflation is no longer above 10%, but it’s still almost double the Bank of England target of 2%. While savings interest rates have increased from the near 0% of the last decade, those that offer above inflation rates are usually illiquid (restricted and limited period). Gold has historically hedged against inflation risk, and allowed investors to retain buying power, although past performance is not a guarantee of future results. Unlike cash in the bank, at the very least it doesn’t guarantee a loss of value.

Compared to property

The surge in interest rates has had a substantial effect on the housing market. In September of 2023, UK house prices recorded their first annual fall in over a decade. While interest rates ended up at 4.75% in 2024. The Office for Budget Responsibility predicts house prices will fall by 10% by the end of 2025.

Compared to bonds

Government bonds are viewed as risk-free but consequently, return small but steady interest. Corporate or foreign government bonds can deliver higher returns but come with commensurate risk. Since 2000 gold has substantially outperformed government bond yields. And where the idea of bond safety has been called into question during the bond rout of 2022, the risk-free allure is somewhat tarnished. Importantly, bonds have a fixed maturity, tying your investment up in the asset until this date, whereas gold can be liquidated anytime. 

Tax on savings

We all have to pay tax on our income, including any gains we make on investments, such as savings, equities, bonds and property – but physical gold is an exception. When you invest in investment-grade tax-free gold,  you can legitimately avoid paying tax on your gains, depending on individual circumstances (and this tax treatment may be subject to change in the future).

It’s a very similar product to an ISA but with no restrictions and no penalties on early liquidation. Furthermore, you are able to keep and control your investment. Many people use physical gold as an efficient form of tax planning, to minimise inheritance tax too.

Global instability

Geopolitical events like conflict, political instability and trade disputes can all impact the gold price, spurring it higher as investors seek safety in the precious metal. The historical evidence for this is stark. The financial crisis in 2008, the Brexit referendum outcome, the Covid pandemic, the Russia/Ukraine war and the current crisis in the Middle East have all been catalysts for a flight to safe-haven gold.

It’s impossible to say what might spark geopolitical tensions, but both the Ukraine and the Middle east remain hotbeds of conflict, either of which could spark further geopolitical instability. Political change and trade tensions have already been marked on 2025’s calendar by the incoming US administration, and there are any number of global touchpaper’s that could be lit in the forthcoming year.

Having thoroughly researched the gold investment market I found The Pure Gold Company. Their consultants were knowledgeable, transparent and kept it all very simple. My gold arrived the next day and I’m now discussing options for silver storage. I highly recommend them.

Oliver Shipton, Partner at Lee & Thompson LLP

I chose The Pure Gold Company due to the good reputation they have dealing with the less experienced investor such as myself. I feel their reputation is well deserved. I was kept informed, anything I didn’t understand was explained well. I have no reservations in recommending The Pure Gold Company to those looking to buy gold or silver.

Charles Campling – Police Officer – Surrey Police Service

I found The Pure Gold Company knowledgeable and trustworthy and in my opinion wouldn’t hesitate to recommend them.

Sir Geoffrey Leigh – Property Entrepreneur

These guys were patient and seemed to understand my situation well. They weren’t pushy or salesy and gave me all the facts so that I could make my own decision. I was surprised at how straightforward they made the process and would certainly recommend The Pure Gold Company to anyone looking to buy gold or silver.

Annabel Bartfeld – Ambassador For Great Ormond Street Hospital

A friend recommended The Pure Gold Company, as they have a reputation of assisting beginners, they were fantastic. They explained in detail how it all works and what options would best suit our circumstances. They guided us on timing and saved us 6% by waiting a couple of weeks.

Racheline Natalie Michaels – Director, Hexagon Of Highgate Ltd

The Pure Gold Company offers a uniquely consultative approach to purchasing and selling physical gold and silver, regardless of how much you are looking to invest.

We pride ourselves on our simple and tailored strategy, working with beginners and experienced investors alike, to find the precious metal investment that will benefit them most.

Whether you are looking to convert personal savings or part of your pension into physical gold or silver, we can provide a tax-efficient solution.

In addition, our Buy Back Guarantee means your gold and silver investment is as liquid as the cash in your bank account.

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Timing & pricing considerations
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Discover all there is to know about buying gold for investment

Our free Investor Guide will reveal:

How to invest in gold
Timing & pricing considerations
Our buy back guarantee

DOWNLOAD THE GUIDE NOW

Read our blog Why buy gold in 2025