With gold prices hitting record high, Kirill Chernovol, Researcher at the Gaidar Institute's International Best Practices Analysis Department, urged investors to be cautious and have a clear understanding of their goals in a comment to Izvestia.
The expert noted that the effectiveness of investments always depends on risk appetite and specific objectives. "For example, if the goal is to make money quickly and there is no fear of losing money, then high-frequency trading will be effective: quick speculation with securities on exchanges. Conversely, if the goal is to preserve money with minimal risk, it is better to keep money in bank deposits with a yield not lower than the inflation rate (currently, the official forecast for 2026 is 4-5%) and an amount of up to 1.4 million per bank; such amounts are insured, and the risk of losing money, including due to depreciation, is minimal," the expert explained.
In this context, gold, according to him, is primarily a defensive asset. “It is traditionally bought with the aim of preserving money, not making money. From the point of view of earning money, it will be considered ineffective: there are more profitable methods of money management and financial instruments with higher returns,” emphasized Kirill Chernovol.
He particularly warned against investing in physical forms of metal with high costs. “These include jewelry and souvenirs: the price includes labor and markups, but when sold, only the metal is usually paid for,” the expert gave as an example. He added that even buying bullion or coins comes with hidden costs and risks, such as storage costs and difficulties in selling. At the same time, the phrase “buy gold” in the financial market can mean different instruments: from impersonal accounts to exchange-traded funds (ETFs), and their reliability is not equal to bank deposit insurance.
Commenting on the growth in demand for precious metals, Kirill Chernovol drew attention to a new major buyer. “By the way, it is interesting that last year, large crypto companies that issue, for example, gold-backed stablecoins such as Tether, equaled central banks in terms of gold purchases,” he noted. This trend, along with geopolitical uncertainty, is keeping gold prices high, but it does not negate the need for a balanced approach to investing in it.