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Gold investments come with many benefits. They can serve as a hedge against inflation, offset risk in your portfolio and offer a solid way to protect your wealth for the long haul. And in recent years, many consumers have bought in.
That high demand has pushed the price of gold upward, with the average price per ounce reaching record highs several times just this year alone. Depending on economic conditions, the price of gold could keep rising as we get into 2025.
What does that mean if you already hold gold in your portfolio? Depending on your goals, it could be a good time to cash in and net some profits. For others, expanding your gold investments may be a better idea. Here’s how experts say you can decide.
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Who should sell their gold right now
If you’ve had your gold investments for a while, they’re likely worth a lot more today than when you bought them. So, if you’re in need of cash or would otherwise need to borrow money to cover an upcoming expense, selling some or all of those assets now — while prices are rising — might be the move to make.
“If you are looking to lock in your profits on gold, then now may be a good time,” says Eric Elkins, CEO of financial consulting firm Double E. “Thus far in 2024 gold is up 29%.” It’s crucial to evaluate your financial needs and assess whether selling gold aligns with your overall portfolio strategy.
Just be aware that if you plan to buy back into gold at a later date, you could eat into those profits if the pricing is not right. “If you wanted to sell today and wait until the price drops to buy back in, you can do that,” Elkin says. “However, you run the risk of the price of gold increasing after you sell and losing potential gains.”
Another scenario in which you might want to consider selling your gold is if its share of your portfolio has grown disproportionately large. Maintaining a well-balanced portfolio is essential for long-term financial stability.
Who should invest more in gold
Investing more into gold is a good idea if you’re looking for a long-term investment. Holding onto gold for the long term can serve as a stable asset class that minimizes risks during economic downturns.
“It’s very hard to predict the best time to buy gold,” Elkins says. “However, if you plan on holding your gold for the long term, then generally it never hurts to get started today… At the end of the day, you are buying a secure asset class that typically won’t have dramatic fluctuations in volatile markets, and it’s a great hedge in your investment portfolio to limit risk if we have domestic or global economic downturns or market returns.” Diversifying your portfolio with gold can provide stability and security in the face of market uncertainties.
Consider a dollar-cost averaging approach when investing in gold, as it allows you to spread out your investments and reduce the impact of market volatility. This strategy can help mitigate risks associated with sudden price fluctuations in the gold market.
Moreover, increasing your gold investments can also serve as a safeguard against inflation. Gold is traditionally sought after as protection against rising inflation rates and can help preserve the value of your assets during times of economic uncertainty.
The bottom line
If you do opt to purchase more gold, there are many ways to go about it. You can buy gold bars and coins, open a gold IRA, purchase gold stocks or ETFs, and more. Consulting with a financial or investment advisor can provide valuable guidance in choosing the right investments for your portfolio. Remember to consider your financial goals and risk tolerance when making decisions about your gold investments.
