Gold Prices Dip Below $5,000 Amid Broader Market Concerns
By John Nada·Feb 14, 2026·6 min read
Gold prices fell below $5,000 amid stock market declines due to AI concerns. This volatility underscores the challenges and strategies for gold investments.
Gold April futures opened at $4,950 per troy ounce on Friday, nearly even with Thursday’s closing price of $4,948.40. The gold price dipped below $5,000 Thursday after remaining above that threshold since Monday. This significant shift in gold prices is indicative of the broader economic climate and investor sentiment, particularly as stock prices also fell on Thursday. The ongoing concerns surrounding artificial intelligence developments have continued to weigh heavily on investor confidence, leading to a volatile market environment.
On Thursday, the S&P 500 (^GSPC) was down 1.6%, the Dow Jones Industrial Average (^DJI) retreated 1.3%, and the Nasdaq Composite (^IXIC) lost 2%. Such declines in the stock market often trigger a chain reaction in related assets, including gold. As a result, many investors, particularly those with leveraged positions, faced margin calls. These margin calls arise when the value of securities falls below a certain level, forcing investors to either deposit more funds or liquidate assets to maintain minimum account values. This scenario often leads to a selloff, not only in stocks but also in traditionally safer assets like gold, as investors scramble for liquidity.
Despite the recent pullback, gold prices exhibited resilience in early trading on Friday morning. The initial opening price of April gold futures remained nearly even with Thursday’s close, suggesting a stability that many investors may find reassuring amid market turbulence. The price movement of gold reflects a complex interaction between its role as a safe haven during economic uncertainty and the pressures exerted by margin calls in a volatile market. Over the past week, gold demonstrated remarkable resilience, achieving a +3.9% increase, while its one-year gain stands at a remarkable 70%. This sustained performance underscores gold's appeal as a hedge against economic instability, making it a focal point for both individual and institutional investors.
To further understand the dynamics of gold pricing, it is essential to analyze how the precious metal's value has changed over different time frames. One month ago, gold prices had risen by +8.1%, and a year prior, they had seen a staggering increase of 70%. Notably, on January 29, gold’s one-year gain peaked at 95.6%, emphasizing the metal's volatility and its ability to attract investors during uncertain economic times.
Many market analysts and investment experts emphasize gold’s role as a diversification tool within a broader investment strategy. An investment in gold can add stability and inflation protection to a portfolio, but it can also dilute gains when stock prices are rising rapidly. Finding the right balance between gold’s diversification benefits and profiting from growth potential in other assets can be a challenging endeavor for investors. This challenge is compounded by the differing opinions among financial professionals regarding the ideal allocation of gold in investment portfolios.
Recommendations for gold allocations vary widely among experts, reflecting differing philosophies on risk and investment strategy. For instance, Robert R. Johnson, a professor at Creighton University’s Heider College of Business, does not advocate for significant gold investing. He argues that while a small position in precious metals may dampen portfolio volatility in the short run, the tradeoff between slightly dampened volatility and the lost long-term return is not prudent, particularly for younger investors with long investing time horizons. This perspective sheds light on the generational divide in investment strategies and risk appetites.
Conversely, Brett Elliott, director of content and SEO at American Precious Metals Exchange (APMEX), recommends that investors set an allocation that aligns with their investing goals. Growth-oriented investors may feel comfortable with a gold allocation of 10% to 15%, as they may seek to capitalize on gold’s performance during economic downturns. Meanwhile, income-focused investors may prefer a smaller position, as gold provides no yield. A recommended allocation of 2% to 5% can provide some resiliency without excessively dragging on income potential.
Blake McLaughlin, executive vice president at Axcap Ventures, supports a gold allocation of 5% to 8%, citing historical data that underlines gold's resilience during economic uncertainty and geopolitical unrest. This perspective aligns with the view that gold, while not offering the outsized return potential of private investments, provides attributes that are increasingly hard to ignore in a turbulent economic landscape.
Thomas Winmill, portfolio manager at Midas Funds, believes that most investors will benefit from a long-term gold allocation of 5% to 15%. He specifically advocates for investing in gold mining companies through mutual funds, as this strategy can provide exposure to gold without the direct ownership of the physical asset. Winmill notes that an investor's risk tolerance and current mix of financial versus hard assets can guide appropriate allocation decisions.
For those who tend to panic during volatile cycles, Winmill suggests keeping their allocation percentage low. On the other hand, if an investor's wealth is primarily tied up in financial assets rather than hard assets, they may opt for a higher gold allocation. The distinction between financial assets (stocks and bonds) and hard assets (real estate, gold, collectibles, etc.) is crucial when determining how much gold to hold.
Vince Stanzione, CEO and founder at First Information, takes a more aggressive stance by recommending a 20% gold allocation, particularly in physical gold or a gold ETF. Stanzione argues for increased exposure to gold as a wealth protection strategy, asserting that gold maintains its purchasing power amidst the devaluation of paper currencies worldwide. This line of reasoning reflects a growing awareness among investors regarding the importance of hedging against inflation and currency risks.
The current market dynamics reveal the nuanced role of gold in modern investment strategies, making it a critical consideration for institutional and individual investors alike. As we navigate through this period of uncertainty marked by rising inflation concerns and fluctuating stock markets, the question of how much gold to hold in a diversified portfolio becomes increasingly pertinent.
Investors are encouraged to monitor gold prices closely, as they can fluctuate due to various economic factors. With the capability to track gold prices 24 hours a day, seven days a week on platforms like Yahoo Finance, investors can stay informed about market movements and make timely decisions regarding their portfolio allocations. Furthermore, understanding the top-performing companies in the gold industry may offer insights into potential investment opportunities. For those interested, Yahoo Finance provides tools to create custom screeners with over 150 different criteria, enabling investors to analyze potential gold investments effectively.
As the landscape of investment continues to evolve, staying abreast of market developments and expert insights can empower investors to make informed decisions. Whether considering gold as a hedge against inflation or as a diversifying asset in a broader investment strategy, the ongoing fluctuations in gold prices underscore its importance in the current economic environment. The interplay between gold and other investments highlights the multifaceted nature of modern finance, where both traditional and innovative strategies must be employed to navigate the complexities of today’s markets.