Gold prices have been trending upward, with an ounce recently exceeding the $5,000 threshold for the first time.
For those looking to invest in this precious metal without a large initial outlay, it is possible to accumulate gold gradually, even with a monthly investment of just $100.
One effective method for this is dollar-cost averaging, which involves consistently investing a fixed amount over time. This strategy allows investors to navigate market fluctuations, acquiring fewer shares when prices are high and more when they are low, thereby managing risk and avoiding emotional decisions.
Investors can utilize this approach with gold through exchange-traded funds (ETFs) such as SPDR Gold Shares ETF (GLD) and iShares Gold Trust (IAU), which make it easier to invest smaller amounts monthly.
For those who diversify their portfolios, increasing gold purchases during market dips and decreasing during rallies may be beneficial. However, for the average investor, dollar-cost averaging presents a more straightforward approach.
Continuing to invest $100 monthly can lead to substantial accumulation over the long term, amounting to $3,600 over three years. The exact quantity of gold or shares that can be purchased will fluctuate monthly.
An analysis by Ben Carlson, Director of Institutional Asset Management at Ritholtz Wealth Management, revealed an annualized return of 5.6% for gold based on its performance from 1928 to 2025. Investors are advised to assess any associated fees before committing to a gold fund, as expense ratios can significantly affect overall returns.
Starting with monthly investments of $100 offers a more attainable route to accumulating gold. This method allows investors to begin immediately, rather than waiting to save enough for an entire ounce. Commitment to this investment habit may yield long-term rewards as smaller contributions can accumulate over time.
Consistent investments in gold can enhance portfolio diversification, providing a buffer against inflation. Those unable to invest $100 monthly may choose to start with smaller amounts and gradually increase their commitments. It is also advisable to periodically review one’s investment portfolio to ensure appropriate diversification aligned with risk tolerance.
However, investors should be prepared for the possibility of extended periods before achieving desired returns. Additionally, if investing in ETFs or mutual funds for gold exposure, fund fees, though typically low, still apply.