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The price of gold has come crashing down this year. Currently hovering around the $4,000 level, it's nowhere near the highs it reached earlier in the year, when it was well above $5,000. That also means that exchange-traded funds (ETFs) that track the precious metal are also down big. The SPDR Gold Shares (NYSEMKT: GLD) fund is now down 6% for the year, and it has fallen 27% from its 52-week high of nearly $510.

But with gold typically being in high demand amid worsening economic conditions, and the country still being on shaky ground these days due to rising inflation, could now be an optimal time to add the SPDR Gold Shares ETF to your portfolio?

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Gold is a safe-haven asset that investors typically buy when they're worried about broader economic conditions. However, with the stock market rallying this year and reaching new heights, there may not be much of an incentive to buy an asset that is highly speculative in nature and that doesn't produce anything or generate any dividend income.

Plus, with interest rates potentially rising this year, there may be opportunities for investors to secure higher yields from relatively safe investments; demand for gold may not be all that high, especially with the U.S. dollar at elevated levels, making the precious metal even more expensive for foreign buyers. While demand may spike if renewed fears of a recession emerge, as of now, there may not be much reason to expect gold prices to rally this year.

While gold may not be due for a big rally this year, it has demonstrated the ability to rise rapidly in recent years. Particularly at a time of so much uncertainty in global economies and geopolitical conflict, there may still be a strong case for buying and holding the SPDR Gold Shares ETF. The economy still isn't in particularly strong shape, and while interest rate hikes may occur this year, they may prove to be temporary measures to curb inflation.

In the bigger picture, there's still ample risk in the economy and even the stock market, with valuations rising to obscene levels for many top-growth stocks. Thus, holding the SPDR Gold Shares ETF can be a good option for the long term, especially for diversification and to reduce your overall risk.

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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Should You Invest in This Gold ETF While the Precious Metal Trades Around $4,000? was originally published by The Motley Fool