A historic buying spree of bullion by central banks has helped spur a rally in recent years, but traders have been rewarded for their bets on the metal for some time. Gold prices have risen about 10-fold since 2000, per Bloomberg, while the S&P 500 has merely quadrupled. As interest in the metal picks up, however, smaller investors may especially want to think twice before adding bullion to their portfolios.

Gold isn’t as liquid as it’s often made out to be, Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management, told Fortune. After all, it’s probably a stretch to say the metal is easily convertible into cash and exchangeable for other goods and services.

“You’re not sending gold to buy your Domino’s pizza,” he said.

In that same vein, the metal can be harder for smaller investors to buy and unload at a competitive price compared to institutions, which often have better access to gold markets and larger quantities of bullion to sell. 

Nonetheless, gold has long held appeal as a hedge against inflation and market volatility. Preliminary results from the University of Michigan’s famous consumer sentiment survey showed respondents are more pessimistic about the U.S. economy than they’ve been since 2022. Many consumers, including Republicans, said “frequent gyrations in economic policies” have made it difficult to plan financially, noted survey director Joanne Hsu.  

Beyond President Donald Trump’s on-again, off-again tariff threats, a general dearth of earnings news from companies has also helped cultivate an increasingly uncertain environment, Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management, told Fortune.

“That’s where people seek safe havens,” he said, “and gold can be seen as that.”

Haworth is somewhat skeptical of the metal’s long-term prospects, but he noted inflation expectations in the Michigan survey spiked to 4.9%, up from 4.3% in February and the highest reading since November 2022. On the other hand, he said, fears of an economic contraction could weigh on gold prices. 

“Because everyone just needs liquidity at that point, right?” he said. “Everyone needs cash.”

While bullion’s nominal spot price has just reached an all-time high, gold’s inflation-adjusted peak of $3,800 came in 1980. That’s when America found itself in the throes of “stagflation,” or the unusual malaise of both runaway inflation and flagging growth.

Central banks dominate market

Central bank buying has fueled gold’s rally in recent years. As countries like China continue to push for de-dollarization, or weaning themselves off the world’s reserve currency, it likely serves as a massive tailwind for the metal. The U.S. dollar has weakened in recent weeks, which makes gold cheaper for foreign buyers since the metal’s price is quoted in greenbacks.  

Purchasing sprees from the likes of China, Poland, India, and Turkey have coincided with less foreign buying of U.S Treasuries, Haworth noted. Meanwhile, if tariffs force targeted nations to export less to America, he explained, they will have even less money to spend on U.S. debt.

“So that trend probably continues” Haworth said, “And it appears to be a goal, right, of current U.S. policy.”

As the Trump administration, which appears fixated on America’s trade deficits with other countries, attempts to reshape global trade, some investors also tout gold’s ability to preserve value amid macroeconomic turmoil.  

“We’ve seen that over centuries gold has been able to—despite the volatility—always mean-revert and always maintain its purchasing power, all while providing significant liquidity,” Thomas Kertsos, co-portfolio manager at First Eagle Investment Management, told Bloomberg.

But Haworth isn’t sure bullion provides that function for investors. That may be something to think about before rushing to Costco to buy more gold bars.