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Safe-haven investments have drawn renewed attention recently as investors seek shelter from economic turbulence. One prime example is gold. The price of gold per ounce soared past $2,700 in October as inflation and other economic concerns drove demand, while Treasury bonds began offering their highest returns in years.
With both options demonstrating strength, you may wonder which makes more sense right now. We asked three investment experts to weigh in on this. Their insights reveal why the answer might not be as simple as choosing one over the other.
Learn more about adding gold to your investment portfolio today.
Gold vs. Treasury bonds: Where should investors turn next?
Daniel Boston, founder of Preserve Gold, emphasizes that there isn’t one route that works for everyone.
“[Your] age, risk tolerance and existing portfolio composition [determine] whether [you] should lean more heavily toward gold or Treasury bonds,” Boston says.
Referring to general allocation guidelines is a good start. But you should also consider your investment goals, time horizon and overall financial situation before investing.
Below we’ll explore why investors might choose each option — or both — this year.
Find out how the right gold investment could benefit you now.
Why investors may want to turn to gold now
Unlike stocks and bonds, gold’s value doesn’t depend on an issuer’s ability to pay, according to Keith Weiner, CEO and founder of Monetary Metals. This unique feature has attracted investors worldwide — with foreign buyers heavily investing in the precious metal throughout 2024.
Beyond its independence from counterparty risk, gold’s appeal has grown stronger amid inflation concerns.
“With inflation sticky at around 3%, many investors remain concerned that we [won’t] reach the Fed’s 2% target,” says Barry Julien, chief investment officer of fixed income at F/m Investments.
Julien’s concerns about persistent inflation align with major financial institutions’ outlook. For example, J.P. Morgan and Goldman Sachs project gold prices could exceed $3,000 per ounce in 2025. These bullish forecasts stem from expected Federal Reserve rate cuts and growing recession concerns.
It’s also worth noting that global central banks have increased their gold purchases in recent years. This aggressive buying signals deep worries about the financial system’s stability.
“Gold has historically served as a safe-haven asset during economic uncertainty,” Boston says. Investing in gold can give you a hedge against market volatility and geopolitical tensions.
Why investors may want to turn to Treasury bonds now
Current market conditions have created a compelling case for Treasury bonds.
“As the Federal Reserve is expected to cut interest rates in 2025, bond prices are likely to rise,” says Boston. “This creates [room] for capital appreciation in addition to interest payments, enhancing overall returns.”
Plus, current Treasury yields sit at their highest point in years.
“With 10-year Treasury yields around 4% and inflation at 2.6%, investors can earn returns that actually outpace inflation,” Boston says. For long-term investors, this presents a chance to lock in these rates before they potentially decline.
Beyond the opportunity for gains, Treasury bonds provide unmatched security.
“The government is the least marginal debtor, the last entity in the world to default,” Weiner says. This security has attracted conservative investors and those seeking to balance riskier investments in their portfolios.
Why investors may want to invest in both
Many experts suggest combining both for maximum benefit rather than choosing between gold and Treasury bonds.
“Gold is uncorrelated. A standard portfolio with 60% equities and 40% bonds benefits from a small bit of gold added,” Weiner says. “Just 4% gold reduces volatility … and improves overall returns.”
Building on Weiner’s analysis, Boston highlights how these two complement each other.
“Treasury bonds offer lower risk and guaranteed returns if held to maturity, [while] gold provides the possibility of higher returns but with greater price volatility,” Boston says.
The bottom line
Generally speaking, both gold and Treasury bonds show promise.
“[If you’re] uncertain, [go with] a balanced approach [incorporating] both into a diversified portfolio,” Boston says.
Factors such as your age and financial situation should also guide your choice.
“The older you are, the more you need cash you can rely on to cover living and medical expenses,” Weiner says.
A higher allocation to Treasury bonds might make sense in this case. However, he notes that younger investors might want to consider more gold, given long-term uncertainties about traditional investments.
Before investing in either option, it may help to discuss your needs and goals with a financial advisor. They’ll help you choose the best approach for optimal diversification through Treasury bonds, gold exchange-traded funds (ETFs), gold individual retirement accounts (IRAs) or other investment vehicles.