Gold is surging, but is it too late to invest? ABC Bullion’s Jordan Eliseo explains how to invest in gold, what drives prices up down (and sometimes sideways), and how to use it in your portfolio.

With gold at or near record highs, it’s time to revisit the fundamentals of what actually drives the gold market, how it fits into a diversified portfolio, and where things could go next.

Here’s everything you need to know about investing in gold, in Eliseo’s own words.

What drives Gold?

“There are three or four key drivers,” Eliseo says. “The first one is what’s happening with interest rates.”

Historically, gold performs well when rates are falling. That’s partly because lower rates reduce the opportunity cost of holding a non-yielding asset like gold. But it doesn’t end there.

“Factor in the second driver, which is inflation,” Eliseo adds. “In a world where rates are coming down [and] inflation’s a little higher than expected, that tends to be very positive for gold.”

The third major driver? Equities. “Gold has tended to be the best performing asset when stocks fall,” he says. That safe-haven status became clear again when Trump’s tariff talk recently rattled markets and investors sought shelter in gold.

And the fourth driver: the US dollar. “We’ve obviously been in a very soft period for the dollar,” Eliseo notes, pointing out that a weaker greenback generally pushes gold higher. With the US dollar down roughly 10% year to date, it’s been a tailwind for bullion.

That said, these drivers don’t always move in harmony.

“In an environment where interest rates are going up, all other things being equal, you’d expect that maybe that’s going to be bad for gold,” he says. “But if inflation’s going up by even more, or if the stock market’s having a serious sell-off, gold’s probably still going to do well.”

Is Gold still worth buying? Even at record highs?

It’s the million-dollar question (literally) for some investors. Eliseo doesn’t offer specific advice, but he does highlight the broader context.

“If you look at the last six months, or calendar year to date, gold’s done exceptionally well,” he says. “It’s up about 20% in Aussie dollar terms. Silver’s gone up even further.”

But don’t get used to those kinds of returns.

“That’s an abnormally high return,” he cautions. “People shouldn’t be expecting returns of 40% per annum out of their bullion holdings. The long run is closer to 10%.”

Gold’s real value lies in its role in a portfolio, not its potential to skyrocket every year. “Gold can complement a diversified portfolio in a very unique way,” Eliseo says. “There aren’t many other assets that have its liquidity and its diversification potential.”

And while the “easy money” in gold may have already been made, Eliseo believes the bull market has “some way to run.”

The Trump Factor

Perhaps surprisingly, Donald Trump’s impact on the gold market isn’t just bluster. According to Eliseo, uncertainty itself is bullish for bullion.

“He’s kind of reimagining the world order, and that creates a bit of uncertainty,” he says. “And that uncertainty is typically pretty positive for gold.”

It’s not just about tariffs or trade. It’s the whole package: potential disruptions to the stock market, pressure on the US dollar, even attempts to bully the Federal Reserve into lowering rates.

All of it, Eliseo says, adds up to an environment where “gold looks good.”

Going sideways: how to spot a flat gold market

Gold didn’t always shine. From 2013 to 2018, it essentially went nowhere. On a graph, it’s nothing but sideways drift.

First, the starting point. “From 2000 to 2011, gold had gone from around $300 to at one point $1,900 an ounce,” he explains. “It had sort of 6x’d.”

Second, the equity bull market kicked into gear. “People were still cautious after the GFC, but then equities really started to take off.”

And third, “inflation was pretty much dead” despite massive stimulus.

All of this created an environment where gold simply lost momentum. But that lull, Eliseo suggests, is behind us.

But nobody can see the future. Not even Jordan. Even though gold is a longer-term investment, you should still keep an eye on its performance to avoid getting stuck in a rut.

And always remember that past performance is never an indicator of future success.

When should you buy Gold?

Here’s where things get personal.

“My brother and my mum did ask me (when to buy), but only after the price had gone up,” Eliseo jokes.

His take? If you’re looking for a fast profit, gold might not be your best bet. But as a medium- to long-term hedge in a diversified portfolio, he still sees merit.

“I wouldn’t be overdoing it as a share of a portfolio,” he says. “But I think it deserves its place alongside equities, fixed income, and cash.”

In other words: Don’t back up the truck. But don’t ignore it either.

Especially not while Trump’s still around.