By Amy C. Arnott, CFA – Morningstar, 26 January 2026
Gold prices have climbed dramatically over recent years, nearly tripling since late 2022 and setting fresh record highs. This surge has been driven by several key factors: central banks around the world are buying gold as part of efforts to diversify away from the U.S. dollar, and investors are seeking a “safe haven” in times of economic and geopolitical uncertainty.
Despite these strong gains, Morningstar analyst Amy C. Arnott explains that gold may now be trading at a historically high level in inflation-adjusted terms – similar to past peaks that were followed by long periods of weak returns. Because gold doesn’t generate cash flows like stocks or bonds and has often experienced big swings after major rallies, investors should be cautious about increasing gold exposure when prices are this elevated.
The article also highlights that gold’s role as a diversifier – due to its low correlation with many other asset classes – can still make it a useful modest position in a diversified portfolio but suggests keeping allocations relatively small given today’s lofty price levels and potential for volatility.
Source:
Gold keeps reaching new heights. Here’s why investors should proceed with caution, by Amy C. Arnott, CFA, Morningstar, 26 January 2026.
Original article: https://www.morningstar.com/markets/gold-keeps-reaching-new-heights-heres-why-investors-should-proceed-with-caution
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