Has gold reached its peak? Experts sound the alarm using Warren Buffett's investment principles as a reference.

The price of gold has skyrocketed in the past year. However, experts suggest that investors should proceed with caution. An advisor recommends considering Warren Buffett's rule: "Be fearful when others are greedy, and be greedy when others are fearful." Experts say that gold should only make up a small portion of an investment portfolio, possibly only 1% or 2% in a diversified portfolio, or even less. As of Tuesday, the SPDR Gold Shares fund (GLD) tracking gold prices has risen by about 11% in 2025. The return rate over the past year has grown by approximately 42%. This year, gold futures prices have also risen by about 10%, currently up 36% from the same period last year. In comparison, the S&P 500 index has risen by about 1.5% in 2025 and by 17% over the past year. Lee Baker, a registered financial planner in the United States and the owner and president of Claris Financial Advisors, mentioned that a year ago he had not received calls from clients about gold investments. But now, he is handling a large number of related inquiries. In response to this, he believes that investors should remember Warren Buffett's classic rule: "Be fearful when others are greedy, and be greedy when others are fearful. In my view, everyone is becoming greedy when it comes to gold." Baker pointed out that the allocation of gold for the average investor should not exceed 3% of a diversified investment portfolio. He said that investors tempted by high returns may make impulsive decisions, buying large amounts of gold and committing the common investment mistake of buying high and selling low. Baker said, "If you want to make money with gold, you have to buy and sell gold, preferably at the right time. If you are getting in now, are you buying at a peak? I don't know." Sameer Samana, Senior Global Market Strategist at Wealth Management Institute, explained that investors typically view gold as a safe haven in turbulent times and purchase gold in highly uncertain situations. He said, "I believe we can attribute this factor to the current situation. Even so, in a real crisis, the performance of bonds outshines gold." Furthermore, Samana pointed out that many investors buy gold because they believe it is a good hedge against inflation. (Data does not always support this investment argument.) He said that recent data shows a halt in progress toward curbing inflation, which has made investors concerned. Samana mentioned that the sanctions on Russia by the United States since 2022 have been a "turbocharger" for gold returns over the past year or more. He said that compared to prices a year ago, this has boosted gold demand, and prices have consequently risen. "Do not chase" gold returns, Samana said. "Overall, you may want to adopt a wait-and-see approach at (current) levels." Experts do not expect gold to continue shining brightly. Baker stated, "In my view, there is no reason for gold prices to continue rising significantly, unless there is a long-lasting war, which I certainly hope does not happen." Baker recommended not buying physical gold but instead investing in gold through funds like exchange-traded funds (ETFs) or by investing in stocks of gold mining companies. Baker said that funds and stocks generally have stronger liquidity if investors need to sell assets. Having a large amount of physical gold may create additional complications for investors, requiring storage and insurance. Insurance may cost investors 1% to 2% of the value of their gold annually, or even more. Similar to Baker's viewpoint, Samana believes that holding 1% to 2% of gold in a diversified investment portfolio may be acceptable for investors. Samana mentioned that investors looking to buy gold should view it as part of a broader commodity investment portfolio, which may include allocations to base metals such as energy, agriculture, copper, as well as precious metals like gold. He said that in Wealth Management's investment models, the overall allocation to commodities ranges from 2% for conservative investors to 7% for more aggressive investors.