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The price of gold has soared to new heights in 2024, with gold futures surging 14.49% since January 2, 2024. Gold’s price per ounce also hit a new all-time high recently following several peaks. In early March, the price punched through to $2,160 per ounce — then a record high. Since then, the price has continued its upward trend, climbing toward its current price of $2,346.33 per ounce (as of April 15).
Evidence that gold was on an upward price trend could be seen in 2023 when gold investing hit an 11-year high as institutional investors turned to gold amid stubborn inflation and the high interest rates aimed at curbing it. So, what’s responsible for gold’s upward trend? And, amid surging gold prices, is it a good time to buy gold? Here’s what the experts say.
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Gold prices are climbing. What experts say about investing now
We consulted several gold experts to better understand the current gold investing environment. Here’s what they said.
Reasons behind Gold’s Surge
Alex Ebkarian, COO and co-founder of Allegiance Gold, explains that the surge in gold prices is due to a combination of economic and geopolitical factors like rising inflation, a weakening dollar, and ongoing global tensions. Additionally, the increased buying of gold by central banks, especially led by BRICS Plus nations, has contributed to the rise in gold prices.
Michael Ashley Schulman, CFA and partner at Running Point Capital Advisors, points out that expectations of multiple interest rate cuts by the Federal Reserve in 2024 have also influenced the rising price of gold. Lower interest rates, coupled with a potentially weakening dollar, make gold more attractive as an investment option.
Is It a Good Time to Buy Gold?
Joe Cavatoni, market strategist, North America, at the World Gold Council, anticipates further strength in the gold market due to various factors. Historical data supports gold as a long-term investment, showcasing over 400% growth in the past two decades.
Despite the potential for high returns, it’s essential for investors to be aware of the volatility of gold prices and the fact that it does not generate income like dividends or interest-bearing assets. Allocating a small portion of your portfolio to gold can provide diversification and act as a hedge against economic uncertainties.
Considerations for Gold Investors
While gold can be a valuable store of value, its performance compared to other assets like stocks may vary. Gold has historically underperformed the stock market, so it is crucial to view it as a means of stabilizing a portfolio rather than focusing solely on returns. Timing the market for gold investments can be challenging due to the influence of economic and geopolitical factors on price movements.
The Takeaway
Gold’s role as a hedge against inflation and a safe haven asset makes it a compelling investment option, especially during uncertain times. Consulting with a financial advisor and limiting gold exposure to a reasonable percentage of your portfolio can help align your investment strategy with your long-term financial goals.
