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Gold prices have soared in 2024, reaching record highs multiple times across the year. Gold is currently at an all-time high of over $2,600 per ounce. A year ago? The average price was just $1,800.
The reasons for the run-up are many: Inflation, geopolitical tensions, and a general flock toward safer investments chief among them. But one thing’s for certain: Those who have bought in have gained big.
The question now is will that trend continue? Is it safe to buy today and still assume growth, or should hopeful investors wait for prices to drop before getting in? We asked some experts to weigh in.
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Should you wait for the price of gold to fall to invest?
In some cases, waiting for the price of gold to drop to get invested could be a mistake. In other instances, it may be worthwhile. Here’s when each applies, according to the experts we spoke to:
No, you shouldn’t wait for the price of gold to fall to invest
If you want to wait for gold prices to fall to invest, you first need to be sure that’s something that will happen. While there’s a chance they will, it’s just not guaranteed — especially with the many economic and geopolitical factors (plus a presidential election) currently at work. That means waiting could come with quite the opportunity cost.
“There is a chance that the gold price does not fall significantly enough for retail investors to get in under $2,000 and instead continue to break all-time highs,” says Ben Nadelstein, head of content at precious metals marketplace Monetary Metals. “If consumers wait to buy gold, they are potentially waiting to buy when interest rates will be lower and the shift to higher yielding assets like gold will have already pushed prices out of reach.”
It also depends on your goals. If you simply want a tangible way to hold your wealth, buying now can certainly help you achieve that. And if you’re eyeing gold for its long-term benefits — like inflation protection or to safeguard your portfolio from risks in other asset classes — then buying earlier is always better.
“Long term holders of gold have been well rewarded,” says James Cordier, CEO and head trader at Alternative Options. While that may mean riding a few ups and downs over the years. “They’re rewarded for doing that as well,” he says.
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Yes, you should wait for the price of gold to fall to invest
If you want to maximize profits and are willing to wait it out, price-watch, and sell your gold off once prices rise again, then holding off could be the better move for you.
“If consumers are looking to maximize potential returns, then they very well could wait for gold prices to fall and buy at the bottom,” says Eric Elkins, CEO of financial consulting firm Double E. “The one jarring issue with this strategy is no one really knows when gold will drop in price or bottom out. There is always a possibility that the consumer could miss on gains if the prices continue to go up over a lengthy period of time.”
To get around this timing-the-market approach, Elkins and other experts suggest doing what’s called “dollar-cost averaging.” Rather than buying a specific amount of gold, you instead commit to buying a specific amount of dollars in gold — regardless of how much it gets you. This helps you still buy into the asset without needing to price-watch and time your purchases.
“If I commit to dollar-cost averaging, I will not time the price of gold, but will be able to buy some now, as well as when the price begins to come down,” says Christopher Mediate, president of Mediate Financial. “This allows you to increase your position still but accumulate more shares at a lower price.”
How to invest in gold
Whenever you decide to invest in gold, there are many ways to do it. You can buy physical gold bars and coins (Costco now has them), or, if you’re saving for retirement, open a gold IRA. You can also buy and trade gold stocks and ETFs, or purchase gold futures if you have more investing savvy. Talk to an investing professional if you need help making the right decision for your portfolio.
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### Additional Insight:
Gold has historically been viewed as a safe haven investment during times of economic uncertainty. The current geopolitical tensions and the uncertainty surrounding the presidential election are likely contributing to the surge in gold prices. It’s essential for investors to consider the relationship between these external factors and the price of gold when making investment decisions.
### Considering Market Volatility:
Market volatility, driven by factors like inflation and political unrest, can significantly impact the price of gold. Investors should closely monitor these variables and consider diversification strategies to mitigate risks associated with investing in the gold market. Diversifying one’s portfolio with a combination of assets can help balance out potential losses in the event of a downturn in gold prices.
### Long-Term vs Short-Term Investment:
When deciding whether to invest in gold, investors should consider their financial goals and investment timeline. Gold can be a long-term hedge against inflation and a store of value, making it an attractive option for investors looking to preserve wealth over time. However, for those looking to capitalize on short-term price fluctuations, timing the market and waiting for a potential price drop may be more beneficial.
### Investment Strategies:
Investors should evaluate their risk tolerance and investment objectives before deciding whether to invest in gold. Dollar-cost averaging, as recommended by experts, can be an effective strategy for mitigating risk and maximizing returns over time. By spreading out investments at regular intervals, investors can benefit from both fluctuations in gold prices and the potential for long-term growth.
