4 Gold Investments That Pay Off During a Recession

Ruslan Lytvyn / iStock.com

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Gold has often been seen as a relatively boring hedge for inflation, but in recent years it’s been an absolute stellar performer.

While gold didn’t move significantly higher when inflation peaked in mid-2022, it took off beginning in October 2023, jumping 83% over the subsequent 18 months. There were many reasons for this pop, from general economic uncertainty to geopolitical turmoil to momentum and speculation.

With the economy contracting in Q1 2025 and the full effect of the Trump administration’s tariffs yet to hit, some economists are bracing for a recession — and that’s an environment that could spell further gains for gold.

Here are some of the ways that investors can participate in the gold market. 

Gold ETFs

The easiest and most liquid way to participate in the gold market is through exchange-traded funds (ETFs). Gold ETFs trade on the public stock exchange and can be bought and sold at any time that the market is open.

In the era of zero-commission brokers, these transactions can be made free of charge, with only a small expense ratio dragging down returns. There’s no need for insurance or storage, there’s no fear of loss, and you can determine the exact value of your investments from second to second on the open market. You can also hold gold ETFs in retirement accounts, some of which prohibit holding physical bullion or collectibles.  

Physical Bullion

Before the invention of gold ETFs, the traditional way of buying gold was through owning physical gold bullion, in the form of bars, ingots or even coins. Even now, investors enjoy owning a tangible asset, one they can touch and hold in their hands, something that’s grown increasingly rare in the era of electronic assets.

Bullion has the benefit of being readily available from dealers and typically 99.9% pure, meaning it will always have a market. The downside with physical bullion is that it must be stored securely, which can be costly. Bullion dealers usually charge a significant markup for either selling or buying bullion, as well. 

Gold Miners

Another way to play a rise in gold prices is to own the companies who actually mine and refine the precious metal. Most of the major gold producers trade on the public stock exchanges and can be bought and sold at no commission, just like gold ETFs.

However, it’s important to note that gold miners have different risk-reward characteristics than owning gold bullion or ETFs. Although mining stocks are influenced by the price of gold, they can be volatile because they’re also influenced by other factors. The earnings of the company, the efficiency with which it’s run, its production costs, and the geopolitical climate are just some of the factors that can move stock prices. 

Gold Mutual Funds

If you like the idea of having a professional investment company manage your assets, you can invest in a gold mutual fund. Although there are a few gold mutual funds that invest strictly in bullion, most offer a blend of physical gold, ETFs and mining companies.

Some also invest in other precious metals, such as silver, platinum or palladium. This can be a good way to diversify your investments, providing an extra layer of safety. But it also introduces a different level of risk and reward, and it means these types of funds may not move in lockstep with the price of gold.

For some investors, this is preferable, but for those looking for direct gold exposure, it may not be the best option. Mutual funds can also be a more expensive option than investing directly in gold ETFs or mining stocks, which have minimal or no expense ratios.  

The Bottom Line

As gold is typically considered a “safe-haven” asset, investors tend to flock to it during periods of uncertainty or economic unrest — such as during a recession. If the contraction in Q1 2025 continues, perhaps due in part to the Trump Administration’s tariffs, gold may continue to shine brightly, perhaps reaching new highs. Just keep in mind that no investment is without risk and that most advisors recommend gold as only a portion of a diversified portfolio. 

Share This Article: