What it is
Gold is a highly dense, malleable, and non-corrosive metal that has been prized for centuries for its intrinsic value and scarcity. It serves multiple roles: as jewelry, in industrial applications, and significantly, as a financial asset. Unlike fiat currencies, gold's supply is finite, and it does not rely on a government's promise of value, making it an alternative asset during times of economic or political instability.
In financial markets, gold prices are quoted in dollars per troy ounce and are influenced by factors like interest rates, inflation expectations, and geopolitical events. When real interest rates are low or negative, gold becomes more attractive as it doesn't offer a yield. It is often reported in the news as a "safe haven asset" during crises. Investors can buy physical gold, gold-backed exchange-traded funds (ETFs), or futures contracts to gain exposure to its price movements.
Why it matters
Gold can act as a portfolio diversifier and a hedge against inflation or market volatility, potentially preserving wealth during economic downturns.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice