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Gold’s remarkable rise over the past year has pushed the precious metal into headlines and portfolios alike. The price of gold recently hit over $5,589 per ounce, and while the value has moderated somewhat in the time since, today’s gold prices are currently hovering above $5,100 per ounce. That’s over twice the value of gold from just one year ago, and now investors who once hesitated to buy gold are weighing whether the opportunity has already passed — or whether the metal still has room to run.
But as the price of gold gets more expensive over time, the entry point for investors naturally becomes steeper. Buying physical gold bullion, gold coins or gold bars now requires a significantly larger upfront investment than it did just a year or two ago. That reality is leading many investors to look beyond traditional gold holdings and explore alternatives that can offer similar diversification benefits to gold — without relying solely on the metal itself.
Fortunately, there are several options worth considering, and there are a few strategic physical gold alternatives, in particular, that may be worth a closer look this month.
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What gold investing alternatives are worth considering this March?
While the alternatives outlined below won’t always mirror gold’s performance exactly, they can still offer protection against inflation, currency shifts and market uncertainty. Here are the options worth considering in this market:
Silver
Silver is often considered gold’s closest relative in the precious metals market. Like gold, silver has historically been used as a store of value and a hedge against inflation. The big difference, though, is that there’s significant industrial demand for silver, which is used in electronics, renewable energy technology and manufacturing. The other differentiator is that silver offers a much more affordable price of just over $80 per ounce currently, allowing it to provide a more affordable entry point into the precious metals space.
The dual role for silver can create stronger price swings and more volatility than gold, though, which can be a downside for more cautious buyers. However, some investors see that volatility as an opportunity to capitalize on. When economic growth accelerates, industrial demand for silver can rise sharply, pushing prices higher. And, as with gold, investors may also flock to silver as a safe-haven asset during times of uncertainty.
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Gold mining stocks
Rather than purchasing the metal directly, another alternative worth considering this month is gold stocks, which are shares in companies that mine and produce gold. Gold mining stocks often move alongside gold prices, but they can also amplify gains when the metal rises.
If gold prices continue trending upward, mining companies may see increased profit margins because the cost of extracting gold typically remains relatively stable while the selling price increases. That dynamic can lead to strong stock performance during bullish gold markets.
Of course, gold mining stocks also carry risks that physical gold does not, including operational costs, management decisions and broader stock market volatility. But for investors comfortable with equities, they can offer leveraged exposure to the gold market.
Gold exchange-traded funds (ETFs)
Gold ETFs provide exposure to the metal without requiring investors to store physical bullion themselves. These funds track the price of gold and can be bought and sold like regular stocks.
In the current market environment, gold ETFs may appeal to investors who want liquidity and flexibility. They allow investors to gain exposure to gold’s price movements without paying premiums for gold coins or bars. And, investing in gold ETFs rather than physical gold also removes the storage and insurance requirements from the mix, which cuts down on both the hassle and cost for investors.
Platinum and palladium
Other precious metals can also serve as potential alternatives to physical gold. Platinum and palladium, for example, are both widely used in industrial applications, particularly in automotive catalytic converters and other manufacturing technologies.
The prices of these metals tend to move differently from gold because industrial demand plays a larger role in determining their value. That difference can actually help diversify a portfolio, since the metals may respond to different economic factors. And, while these metals can be more volatile than gold, they can also benefit from supply shortages or strong industrial demand. That, in turn, creates potential upside for investors who are willing to accept a bit more risk.
Commodity-focused mutual funds or ETFs
Another option for investors who want diversification is broader commodity funds. These funds invest in baskets of commodities, which can include precious metals, energy products, agricultural goods and industrial materials.
Because commodities often perform well during periods of inflation or currency instability, they can offer similar portfolio protection benefits as gold. At the same time, spreading investments across multiple commodities can help reduce the risk associated with relying on a single asset.
The bottom line
Gold remains a powerful hedge against economic uncertainty, and its strong performance in recent years has reinforced its reputation as a safe-haven asset. But with prices sitting at over $5,100 per ounce currently, investors may want to think carefully about how they gain exposure to the precious metals market.
Alternatives like silver, gold mining stocks, gold ETFs, other precious metals and diversified commodity funds can all offer different ways to participate in the broader commodities landscape. Each comes with its own risks and advantages, though, so the right choice will depend on an investor’s goals, time horizon and tolerance for volatility.