As gold hits record highs, one allocation framework stands out for balancing growth and protection.
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Gold has been having a moment — again. With gold prices now closing in on $4,500 per ounce, the precious metal has shifted from a quiet portfolio hedge into one of the most closely watched assets in global markets. For investors who've held gold bullion for years, the surge has validated gold's staying power. For everyone else, though, it's prompting a more urgent question: How much gold exposure is enough — and how should it be structured?
That question matters because the uptick in gold prices isn't happening in isolation. Gold's rise has been fueled by a mix of persistent inflation concerns, ongoing geopolitical tensions and a growing desire for assets that sit outside traditional financial systems. As confidence in paper assets ebbs and flows, gold is increasingly being viewed not just as protection, but as a core strategic holding. Against that backdrop, allocation strategies are getting a second look.
And, one approach that's gaining attention is the 60/20/20 rule. But what exactly is this rule for gold investing, and why does it matter in today's landscape? That's what we'll detail below.
Learn how to add gold to your investment portfolio today.
What is the 60/20/20 rule for gold investing?
The 60/20/20 rule isn't a universal industry standard. It's a practical allocation framework that some investors use to diversify within their gold exposure. Instead of treating gold as a single bucket, the rule breaks it into three distinct roles:
- 60% physical gold: This is the foundation. Physical gold — meaning gold coins or bars held directly or through allocated storage — is meant to act as long-term wealth protection. It's the portion that isn't tied to corporate earnings, balance sheets or market sentiment. Investors using the 60/20/20 rule typically see this slice as the asset designed to hold value across economic cycles.
- 20% gold-backed financial instruments: This portion often includes gold exchange-traded funds (ETFs), trusts or other paper gold products that track the price of gold. While these instruments don't offer the same ownership experience as physical gold bullion, they're generally easier to buy, sell and rebalance. In this framework, the 20% allocation adds liquidity and tactical flexibility.
- 20% growth-oriented gold exposure: The final slice is where investors may take on more risk in exchange for potential upside. This can include gold mining stocks, royalty companies or actively managed gold funds. These assets can outperform physical gold during strong bull markets, but they can also underperform when costs rise or equity markets fall.
Together, the three segments are designed to balance stability (60%), accessibility (20%) and growth potential (20%) without relying on a single expression of gold to do all the work.
Find out more about the many benefits of gold investing here.
Why does the 60/20/20 gold investing rule matter to investors now?
The current economic conditions make strategic gold allocation more relevant than it's been in decades. Despite some easing, core inflation remains stubbornly above the Federal Reserve's 2% target, meaning that consumer goods prices continue to rise. The national debt is also growing rapidly, raising concerns about long-term dollar stability. Meanwhile, geopolitical tensions continue to impact global trade and financial markets.
Gold has historically performed well during these periods of monetary uncertainty, though. When inflation outpaces the returns on bonds or savings accounts, precious metals often preserve purchasing power in ways paper assets cannot. With many economists predicting continued inflationary pressure through at least part of 2026, the protective qualities of gold allocation may become increasingly valuable.
The 60/20/20 framework also addresses behavioral investing mistakes that are easy to make. Many investors chase gold prices during rallies and sell during corrections, consistently buying high and selling low. A disciplined allocation strategy removes emotion from the equation. By maintaining consistent gold exposure and rebalancing periodically, you capture long-term value without trying to time the market.
Market volatility adds another dimension to the mix. Stock market uncertainty driven by things like AI speculation, commercial real estate concerns and banking sector instability has investors seeking non-correlated assets. Gold's historical tendency to move independently of stocks makes it an effective hedge when equity markets stumble, but finding the right balance within your gold holdings is still crucial.
The bottom line
The 60/20/20 rule for gold investing isn't a magic formula, and it isn't right for everyone. But it reflects a shift in how investors are thinking about gold right now, not as a single defensive asset, but as a toolkit with multiple jobs to do. By separating stability, liquidity and growth into clear roles, the framework offers a way to stay exposed to gold's long-term appeal while adapting to today's more complex economic backdrop. In a market where uncertainty feels structural rather than temporary, that kind of balance is exactly why the rule is getting renewed attention.
Edited by Matt Richardson
