For thousands of years, gold has captivated humanity.

The precious metal has long been seen as a solid way to store and build wealth.

What's more, I was taught that a prudent investor should count gold as part of their portfolio.

In times of market uncertainty and volatility, gold shines bright.

This week, gold went past the US$3,110 mark, a new all-time high.

So far this year, the metal is up about 18%.

Some are celebrating the rapid rise in the price of gold, while others lament it.

Hidden costs of gold

My partner said we should increase our gold holdings at the start of the year.

I argued against that proposition, and unfortunately, on that occasion, I got my way.

I said there are better, more productive places to put our money.

Yes, this year's surging price of gold has cost me more than most.

But not all ASX investors have missed out.

A story I wrote last week examined how some ASX-listed gold miners have been profiting from the booming gold price.

That story noted how Newmont Corp (ASX: NEM) shareholders have seen gains exceeding 27%, while Evolution Mining Ltd (ASX: EVN) shares have increased 44% since the start of the calendar year.

Another recent article published by my colleague, Aaron, showed that gold has now outperformed the S&P 500 since 2000.

While I've watched my ASX holdings take a hit, gold lovers grin with glee.

Gold has certainly done its job as an effective hedge this year.

Will it ever end?

Goldman Sachs has raised its end of 2025 price target to US$3,300 per ounce, up from US$3,100 per ounce, which it has already exceeded.

Now, the Department of Industry, Science, and Resources' latest Resources and Energy quarterly report shows that 2025 looks to continue to be a good year for ASX gold shares.

The Office of the Chief Economist forecasts Australian gold earnings to increase to $36 billion in 2024–25 "due to a rise in export volumes and a high gold price".

Still, while gold is rightfully cast as a safe haven for investors over the long term, it hasn't always been the safest way to store your wealth.

Back in August 2020, gold hit another high and was trading at around US$2040 per ounce.

By October 2022, it had dropped below US$1650 per ounce, having lost about 20% of its value over a couple of years.

That wasn't the first time the gold price had sunk.

In September 1980, gold was trading at about US$670 per ounce.

By May 1982, it had shed half its value and was going for around US$330 an ounce.

Don't get me wrong. I still see gold as a great long-term investment and an effective hedge.

But, like all commodities, the gold price will fluctuate.

Gold is not immune from a pullback.

And those pullbacks often follow rapid gains.