Getty Images
Gold’s price growth has been interesting to watch so far in 2024. After trading at $2,063.73 per ounce on January 1, the commodity’s price rose more than 18% to trade at $2,439.98 per ounce by May 20. While that price has since cooled, with gold is trading today at $2,365.77 per ounceprofit in the Precious metal are still 14.64% year-to-date.
That’s impressive growth. And there are different reasons that growth can continue. So it might be a good idea to do that buy gold now – especially if you want to participate in the future price growth of the commodity.
Compare your gold investment options now.
6 reasons to buy gold when the price goes up
Gold price growth so far in 2024 has been impressive. But it’s not the only reason add the commodity to your portfolio straight away. Here are a few more:
Protection against inflation
“Gold has historically maintained its value over time, making it an effective hedge against inflation,” explains Matt Teifke, co-owner of the financial planning firm TR3 Capital.
And that protection against inflation is important given the current economic climate. As inflation begins to cool, prices rose by 3.3% year-on-year in May. Should persistent inflation persist, this could help the price of gold rise.
“The best way to think of gold is not necessarily as an investment; it makes more sense to think of gold as money,” explains Vijay Marolia, money manager and managing partner at financial planning firm Regal Point Capital. “So if all your money is in US dollars, your money is losing more than 3% per year in terms of purchasing power. By keeping some of your liquid assets in gold and other precious metals, you can better protect your money.” purchasing power while inflation continues to eat away at the dollar.”
Protect your portfolio against inflation with gold today.
Diversification
“Including gold in a diversified portfolio can reduce overall risk due to its low correlation with other asset classes such as stocks and bonds,” says Teifke. So you can increase your risk-adjusted returns by diversifying your portfolio with gold. But if you do, keep in mind that you have to limit your gold investments. A well-balanced portfolio typically includes an allocation of 10% or less to gold.
A current discount
Although the gold price is up over 14% this year, it is down just over 3% from its most recent high. So if you buy gold nowbefore the price goes up again, you can do this at a discount.
Qualities of safe havens
“Gold typically performs well during economic downturns, geopolitical tensions and market volatility, providing a safe haven for investors,” says Teifke. That Safe haven Qualities are important today. Geopolitical conditions are worrying and with the presidential elections coming later this year, political market risks could soon materialize.
Liquidity
“Gold is highly liquid, meaning it can be easily bought and sold in the market,” Teifke explains. So if you want to add gold to your portfolio, you have to find it easy to do that. And if you decide it’s time to sell your gold investments, it shouldn’t be difficult to find a buyer.
Universal value
“Gold is universally recognized and valued, making it a reliable store of value worldwide,” says Teifke.
“Gold has been money for 5,000 years and is still accepted in every country in the world,” Marolia says in agreement with Teifke.
it comes down to
The price of gold has risen significantly this year, with the potential to rise even higher. And it’s easy to understand why. Thanks to the inflation protection it can provide, portfolio diversification, safe haven qualities and liquidity, many investors would benefit from adding gold to their investments now. And with universal value only down from its current price, it would be wise to act quickly before the cost of the precious metal becomes prohibitive. Compare your gold investment options now!
