Contrary to the traditional view of gold as a “boring” investment, millennials and Gen Z investors are increasingly drawn to the precious metal. According to a recent study by Bank of America Private Bank, among wealthy investors under the age of 43, 45% own gold as a physical asset, and another 45% are interested in holding it. These percentages are significantly higher compared to other age groups.
The renewed interest in gold is driven by several factors. Firstly, the spot price of gold has been performing strongly, rising above $2,400 per ounce. Secondly, the visibility of gold has increased, with big-box retailers like Costco now selling 1-oz gold bars, generating up to $200 million in monthly sales.
Younger investors are attracted to gold’s tangibility and perceived ability to preserve capital, especially in uncertain economic times. As one financial planner noted, “as they get wealthier, they are more interested in investing in directly-held, self-custodied gold” as a hedge against potential financial system disruptions or currency collapses.
However, experts caution that equities should still be the primary portfolio allocation, with gold serving as a complementary asset (around 5% allocation). Investing in gold ETFs can provide exposure without the hassles of physical ownership, storage, and security.