Gold prices soar, should ordinary people follow suit?

Since the beginning of the year, gold prices have repeatedly become a focus—this time, not because of its brilliance, but because of its soaring, intimidating high prices.

As of now, international gold prices have broken through $4,900 per ounce, and domestic gold prices have also remained above 1000 yuan per gram. For many, gold is shifting from being a “precious metal” to a “precious metal that makes people hesitant.”

In front of the jewelry counters, Aunt Li hesitated for a while and then left empty-handed. “Last year, I still planned to buy some gold jewelry as dowry for my daughter. Now, at this price, even buying a thin chain requires careful consideration.”

Not only ordinary consumers are conflicted; many experienced investors are also discussing: “Is buying gold now chasing the high?”

Why has gold become a “hot potato”?

International Level: Safe-haven sentiment continues to rise
Looking globally, the Russia-Ukraine conflict has lasted nearly four years, tensions in the Middle East remain high, and trade frictions between Europe and America persist… The more unstable the world, the more traditional safe-haven assets like gold are favored by capital.

Although the Federal Reserve’s rate hikes have paused, high interest rate environments are expected to continue. This “interest rate peaking without decline” phase often supports gold—once future rates are cut, the appeal of gold, which does not generate interest, will relatively increase.

Domestic Perspective: Confidence and asset allocation shifts
Currently, China’s economy is at a critical recovery stage. The real estate market adjustment and stock market volatility have led many families to reassess their asset allocation. When traditional investment channels yield unstable returns, “hard currency” gold naturally becomes an option for some.

The fluctuation of the RMB exchange rate also transmits to domestic gold prices. Since international gold prices are quoted in USD, exchange rate changes directly impact domestic gold prices.

So, is gold still worth buying now?

Physical Gold: Approach Rationally
If, like Aunt Li, you buy jewelry for personal use or as gifts, you only need to consider your own financial situation and not overly focus on its investment attributes. But if you plan to buy gold bars or coins for investment, current prices indeed warrant more caution.

Historical experience reminds us that when gold becomes a hot topic on the streets, it’s often not the ideal buying opportunity.

In the long run, gold as part of asset allocation can indeed help diversify risk, but its proportion should not be too high—generally recommended to be controlled within 5%–10% of household financial assets.

Gold Financial Products: Understand the Rules Before Participating
Paper gold, gold ETFs, gold futures—these products have lower thresholds and convenient trading, but their risk characteristics vary:

- Paper gold and gold ETFs are relatively simple to operate, suitable for investors who want to participate in gold markets without holding physical gold;
- Gold futures, options, and other derivatives are highly leveraged and volatile, so ordinary investors should proceed with caution.

Remember one principle: don’t touch products you don’t understand, even if they seem tempting.

Besides gold, what other safe allocation options are there?

Government Bonds: Backed by National Credit
Government bonds are known as “golden bonds” for their high safety. Especially savings bonds, which usually offer higher returns than bank deposits of the same period, and are easy to purchase with low thresholds—suitable for low-risk, conservative middle-aged and elderly groups.

Fixed Deposits: A Classic Safe Choice
Although returns are modest, bank deposits are protected by deposit insurance, with full repayment within 500,000 yuan. In today’s environment, “capital preservation” can sometimes be more valuable than “high returns.”

Money Market Funds: Liquidity Management Tools
Such as Yu’e Bao, Lingqian Tong, and other money market funds, offer good liquidity and relatively low risk, suitable for short-term idle funds, with yields generally slightly higher than bank savings accounts.

Insurance: The Often Overlooked “Financial Stabilizer”
When discussing long-term stable asset allocation, insurance is a tool worth paying attention to. Its advantages include:

1. Certainty: Once the contract is signed, coverage and cash value are locked in, unaffected by market fluctuations—especially valuable in uncertain markets.
2. Leverage: For a small premium, you can obtain high coverage, e.g., a million medical insurance for just a few hundred yuan per year can cover hundreds of thousands in medical expenses.
3. Savings Function: Products like annuities and increasing whole life insurance have long-term savings and appreciation functions, helping cultivate a habit of continuous saving.
4. Risk Transfer: Shifting risks such as illness, accidents, and longevity to the insurance company, avoiding heavy financial burdens on families due to unexpected risks.

Who is insurance suitable for?

- Middle-aged adults with family responsibilities: as the main breadwinner, they need insurance to prevent risks.
- Ordinary people with less investment experience: seeking asset preservation and appreciation without market volatility, savings-type insurance is an option.
- Pre-retirement planning groups: supplement social security with commercial pension insurance to ensure a steady income after retirement.
- Wealth transfer needs: achieve targeted asset inheritance and tax planning through insurance.

Returning to the initial question: gold, can I still buy it now?

For ordinary people, chasing high prices requires rationality; for investors, gold can be part of a diversified portfolio but should not be heavily concentrated.

In times full of uncertainty, sometimes “not losing money” is more important than “making quick gains,” and building a solid safety net is more urgent than chasing returns.

When we marvel at gold prices, it’s wise to first examine your own “financial foundation”: Is your emergency fund sufficient? Are your basic protections in place? Do you have retirement plans? Once these roots are solid, then consider how to grow your wealth steadily.

After all, true “gold” isn’t the gold locked in a safe, but a life that is secure, prepared, and composed.

How would you choose to protect your wealth and life?

Feel free to leave a comment and share your thoughts.