Yes, you absolutely can lose money investing in gold, as its price is volatile and can drop due to market shifts, economic improvements (when investors sell gold for riskier assets), opportunity costs (missing out on better-performing investments like stocks), and risks associated with physical gold (storage, counterfeiting, dealer fraud) or complex derivatives (futures/CFDs). While gold often serves as a hedge against inflation, its value isn't guaranteed, and losses can occur from price drops or poor investment choices, as seen in years like 2022 or during the 2011-2016 price decline.
Several factors influence gold prices, one of the most important being inflation and interest, which are linked. Gold has an inherently limited supply, which makes it an inflation hedge, but despite the commodity's reputation for being a safe-haven investment, gold is not risk-free. Your browser can't play this video.
Gold is not risk-free
These include supply and demand, the state of the global economy, and political uncertainty, all of which mean gold can be a volatile investment. You should seek professional financial advice if you're uncertain whether this is the right kind of investment for you.
The 5-year return on gold has shown significant growth. According to historical data, the price of gold has increased by around 121.79% over the past five years. This demonstrates that gold has served as a strong asset for investors during this period.
Gold's 20-Year Return
Through the end of 2024, gold had posted a 20-year average annual return of 9.47%. If you had invested $10,000 at the start of this period, you'd have $65,967 in your account, a total gain of roughly 560%.
TL;DR: $100,000 Buys About 38–41 Ounces of Gold.
Gold, on the other hand, doesn't pay dividends. It doesn't generate income. It doesn't even promise to repay you later. Its value is based purely on supply and demand, which is unpredictable and often driven by fear rather than logic.
Yes, Costco gold is real, consisting of legitimate 1-ounce, 24-karat gold bars from reputable refiners like PAMP Suisse and Rand Refinery, authenticated by assay cards, sold with low markups over spot price, but can be difficult to sell back to Costco.
Over the last 20 years (roughly 2005-2025), gold has delivered strong returns, with sources showing a total gain of around 660% to over 700%, translating to an average annual return (CAGR) of approximately 9% to 11%, acting as a significant hedge during periods of economic uncertainty and inflation, though with notable volatility year-to-year, including major peaks during crises and corrections.
Yes, selling gold is generally taxable at the federal level as a capital gain, with profits on physical gold (bullion, coins) usually taxed at a higher maximum rate of 28% because the IRS classifies them as "collectibles," unlike stocks taxed up to 20%. You'll pay capital gains tax on the profit (sale price minus cost basis), with shorter holding times (under a year) taxed at higher ordinary income rates, and you might also owe the Net Investment Income Tax (NIIT) and state taxes.
Here's the quick answer: as much as your wallet—and your heart—can bear. There are no federal regulations in the U.S. that limit how much gold you can own. Whether you want to hide a single gold coin or accumulate a vault-full of bars, it's all perfectly legal.
You must report capital gains in the tax year you dispose of gold. If you sell gold in 2025, you report the gain on your 2025 tax return filed in 2026. There's no minimum threshold—all gains must be reported, whether $50 or $50,000. Selling gold for profit obviously triggers reporting requirements.
Key takeaways
Gold prices soared in 2025, driven by tariff uncertainty and strong demand from ETFs and central banks. Looking ahead, the 2026 and 2027 outlook for the metal remains bullish.
Gold has been in decline for quite some time since the end of the inflationary period of the 1980s. And the price of an ounce hit a low of $260 in 2004. In euros (the new currency), the price reached a low of 290 euros in 2001.
Neither gold coins nor bars are definitively better; the choice depends on your goals, with bars favoring lower premiums for large investments (wealth preservation) and coins offering flexibility, liquidity, and potential collectible value for smaller, diverse holdings, making bars better for maximizing ounces for dollars and coins better for easier selling/trading.