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Inflation Things cooled down again in September, the Bureau of Labor Statistics announced Thursday. Now that interest rates are down to 2.4%, they are closer to the Federal Reserve’s target of 2%. That includes expectations for two 25 basis point rate cuts when the Fed meets again in November and December. Combined with the half a percentage point By cutting the Fed in September, the federal funds rate could be almost a full point lower by the end of the year.
Understanding this potential, savers, borrowers and investors may all want to align their strategies. Investors in particular may want to reconsider their current assets and look for alternative assets, such as precious metals. Investing in goldfor example, press a 11 years high last year, when inflation was still high and interest rate cuts still seemed far away. But is it still worth investing in it now, ahead of another rate cut at the November Fed meeting? Below we’ll outline three reasons why gold could still be worth pursuing now.
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Should You Invest in Gold Before the November Fed Meeting?
Not sure if this is the right time to invest in gold? Here are three smart reasons why you should consider doing so before the November Fed meeting.
The price rises
The price of gold has seen explosive growth so far in 2024, starting from 2024 $2,063.73 per ounce before it rises past $2,600 in September. Currently at $2,672.22 per ounce, gold has grown nearly 30% this year and many experts predict it could soon hit the mark. $3,000 marking.
So it makes sense to invest before that happens, while the price is still manageable. And with the Fed poised to take actions that could resonate with the broader economy, now could be a good time to do so.
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It still makes sense to diversify
It will take some time for the September rate cuts and the likely November rate cut to take effect. When these consequences are felt, you’ll be glad you have a diversified portfolio to offset any unforeseen negative effects. Gold can help diversify because it often maintains and increases in value during volatile economic periods. Just make sure you invest in a measured way, as most experts recommend limiting gold 10% or less of your total portfolio.
Inflation is cyclical
Certainly, this current inflation cycle appears to be coming to an end. But inflation is cyclical and will return at some point, perhaps sooner than expected. While the Fed works to establish a new standard, it makes sense to buy gold now to build in that protection preemptively. Gold is considered traditional hedge against inflationregardless of when that inflation comes.
Then add it now so you’re ready for when that happens. If you wait for additional inflation news and further Fed activity, the subsequent price could move out of reach.
The bottom line
For those trying to time a gold investment, it is crucial to remember that gold is a long-term investment with long-term implications. Investing now, before another Federal Reserve meeting that could allow the economy to readjust, could be beneficial for many investors. This allows them to benefit from a rising price, while still diversifying their portfolio and adding an inflation hedge for the future. And if investors change their minds quickly, they are likely to quickly sell their gold investment for a profit.
Do you have more questions? Read more about investing in gold online today.
