Gold is a critical asset for a diversified portfolio, but loading up at new highs typically causes stress

Gold has been an asset and means of exchange for thousands of years. However, buying gold at the current lofty price level requires recognizing that there are additional downside risks. Loading up on gold at over $4,000 per ounce could cause significant indigestion if the price continues to correct. Gold has experienced several substantial pullbacks over the past two and a half decades, even though they have not negated the bullish trend. Therefore, buying gold at current prices involves significant risks.

Accumulating gold as a portfolio diversifier is a process that requires small purchases, leaving plenty of room to add on further declines. When speculating on a continuation of the parabolic rally, risk-reward dynamics are critical. Approach speculative positions with profit horizons and stops that offer a rational risk-reward profile.

In December 2025, we may have already seen the highs in gold for this year. Gold has made new highs in 9 consecutive quarters, including Q4 2025. Time will tell if the precious metal climbs to another new high in Q1 2026 to keep the bullish streak intact.