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You’ve probably seen the headlines about gold. The price of an ounce has torn through the $3,000, $4,000 and even $5,000 milestones, and some Wall Street analysts have their sights set on $6,000 or higher.

But for all of gold’s recent visibility, many people don’t know a whole lot about it. It doesn’t behave like a stock, and there are several different ways to invest in it, each with its own benefits and drawbacks.

Here’s a quick primer on why gold has rallied, what analysts see ahead, and how the mechanics of investing work.

Why has the price of gold risen so fast?

Gold is often considered a safe haven during destabilizing events. Investors as well as governments (central banks) tend to view gold as an insurance policy, buying it when there’s an increase in economic or geopolitical uncertainty. Broad new tariffs and other major shifts in U.S. foreign policy have generated plenty of both in the last year.

The appeal of gold is its immunity. Regardless of how currencies or interest rates are moving, gold is a physical asset with a reliable store of value. Investors hold it as a hedge against inflation and currency declines, and central banks use it to buffer their reserves against geopolitical risks. That’s why it tends to perform well when the dollar is weaker and interest rates are falling.

All of these factors led to a 65% gain in gold prices last year, the precious metal’s strongest annual performance since 1979. A record $89 billion flowed into physically-backed gold ETFs, including a record $50 billion to U.S.-listed ETFs, according to the World Gold Council, a trade group for mining companies.

What’s next for gold prices?

Gold’s impressive run continued at the start of 2026, and prices rose as high as $5,595 an ounce — setting a new record on Jan. 29 — before losing their steam. As of Tuesday, they had fallen below $5,000.

According to TheStreet’s Jan. 17 roundup of Wall Street forecasts, the average 2026 price estimate on gold is $5,180, with some analysts predicting $6,000 or $6,600 if global tensions and dollar pressures continue.

If these factors ease, however, prices could fall, according to a 2026 outlook the World Gold Council wrote in December. Things on the geopolitical front could settle down and economic growth could accelerate, pushing the dollar and interest rates higher.

Either way, gold prices are notoriously unpredictable in the short-term. Just because it’s considered a safe haven doesn’t make it a safer bet than any other investment.

“The truth is gold and other precious metals are highly volatile and past performance is not a good predictor of future returns,” the Commodity Futures Trading Commission warns on its website.

How does gold differ from other assets?

Investing in gold isn’t like investing in a stock or bond. It doesn’t pay dividends or interest, and it’s not linked to corporate performance or debt obligations.

Gold is also less beholden to economic cycles than stocks (which can thrive on economic growth) or bonds (which depend on interest rates.) This can make it an appealing way to diversify so your investment portfolio isn’t as exposed to the risks inherent in the stock or bond market.

That said, when gold is rising, it may not be a great sign for the broader economy or dollar-based measures of investment performance.

“When one's own currency goes down, it makes it look like the things measured in it went up,” billionaire investor Ray Dalio wrote last month on X. For instance, last year the Standard & Poor’s 500 index returned 18% for a dollar-based investor, but lost 28% for a gold-based investor, he said.

How do you invest in gold?

You can invest in gold in a number of ways, each of which has pluses and minuses:

Buy actual gold: If you want to be able to hold your investment in your hand, gold coins and bars are widely available from banks or reputable dealers. (You can also buy coins from the U.S. Mint and even purchase bars at Costco.) But you may have to pay to store and insure the gold, and selling it won’t be as clear cut or convenient.

Gold ETFs: Exchange-traded funds that are physically backed by gold are one of the easiest ways to invest in the precious metal. ETFs invest in gold bullion or related assets and trade like stocks. There are management fees, however, and you don’t actually get to hold the gold.

Gold mutual funds: These are similar to gold ETFs but the funds are actively managed and may invest in more diversified assets, including gold mining companies. This may mean you’ll pay higher fees than you would with a passively managed ETF.

Gold mining stocks: Another way to invest in gold is to buy stock in the companies that mine it. Many of these companies pay dividends in addition to potentially becoming more valuable when gold is in demand. On the other hand, other factors can influence the share price, including how that specific company is run and what’s happening in the broader stock market.

Gold futures and options: These are contracts to buy or sell gold in the future at an agreed-upon price. These are not advised for beginner investors, however, since small market movements can result in significant losses.

Note: Profits from selling gold can be taxed differently depending on how you invest, so you’ll want to consult a tax planner.

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